THOMAS COOK FAT CATS MUST PAY BACK BONUSES
As staff work for free to get stricken Britons home... FURY grows over bosses VULTURE travel firm rivals cash in on misery CITY speculators make a killing
FAT CAT bosses have been accused of lining their pockets with millions while overseeing the demise of Thomas Cook.
Furious customers yesterday demanded greedy executives hand back more than £21million paid in salaries and bonuses over the last five years as the travel giant careered towards disaster.
The calls came as the holiday dreams of more than a million
people were left in tatters as weddings, honeymoons and dream trips to Disneyland lay in ruins.
There were chaotic and tearful scenes as Britain’s biggest peacetime repatriation was launched to rescue 155,000 holidaymakers stranded around the world.
The liquidation of the world’s oldest travel firm will see the loss of more than 21,000 jobs, 9,000 of them in the UK, and the closure of nearly 600 shops.
Shocked staff were left in tears after arriving at work yesterday to find branches shut down.
But there was huge support for workers. People on a flight from Las Vegas to Manchester held a whip round after hearing the pilots and cabin crew would probably not be paid and were therefore working for free to fly them home.
Experts warned last night that the cost of overseas family holidays would rise and campaigners branded some airlines and travel firms “vultures” for hiking prices after Thomas Cook went under.
And fury mounted over news that the collapse could net financial speculators up to $250million (£200million).
The Government announced a “fast track” inquiry last night into the conduct of chief executive Dr Peter Fankhauser and fellow executives in the wake of the collapse.
Concerns
Swiss-born Dr Fankhauser, 58, has pocketed £8.3million since taking the helm in 2014, including a £2.9million bonus in 2015.
Former chief financial officers Bill Scott and Michael Healy have together been paid around £7million since 2014.
During this time, more than £4million was split between nine other non-executive directors.
Prime Minister Boris Johnson said in New York: “I think the questions we’ve got to ask ourselves now [are]: how can this thing be stopped from happening in the future?
“How can we make sure that tour operators take proper precautions with their business models where you don’t end up with a situation where the taxpayer, the state, is having to step in and bring people home?
He added: “I have questions, for one, about whether it’s right that the directors or whoever, the board, should pay themselves large sums when businesses can go down the tubes like that.”
Downing Street said there were “serious concerns” about some of the bonuses paid and the directors’ conduct would form part of the Insolvency Service investigation.
Last night, a YouGov poll found, 54 per cent of Britons believe the Government was right not to step in to save Thomas Cook, with just 22 per cent disagreeing.
Sixty-three per cent said the firm would collapsed even if a £200million bail-out was agreed. Thomas Cook’s demise follows years of alleged mismanagement and over-expansion, which began in 2011 when a mass restructuring left the firm battling huge debts.
It announced a £900million rescue deal in July, led by its biggest shareholder, Chinese conglomerate Fosun, and others. But its lenders demanded a further £200million to cover any shortfall over the winter holiday period before the restructure could go ahead.
Last night there was concern at city speculators making money out of the firm’s collapse. Hedge funds have bought credit default swaps (CDS) – financial products that pay out when a company defaults on its debts – a popular way to bet on firms facing financial difficulties.
If Thomas Cook had been rescued, CDS on its debt may have become worthless. With some of its bondholders also owning CDS, this could have led to hedge funds vetoing a rescue deal to guarantee payouts on their swaps.
Angry passengers hit out at Thomas Cook yesterday over its handling of the crisis. At Gatwick Airport, Steve Tarren, 51, of Gloucestershire, said: “The fat cats are to blame. They were still taking money right up until the time of the collapse.”
Mr Tarren, who was flying to Cancun, in Mexico, with his partner Joanne Devereux-Ward, added: “We have had to pay an extra £1,200 for a BA flight. We are not happy.”
Mother Sam Hemsley, 44, from Swaffham, Norfolk, who was heading to Turkey with her three children Pippa, 17, Jessica, 12, and James, nine, said they party had to pay an extra £1,000 after their flights were cancelled.
She said: “Why couldn’t Thomas Cook just have been honest and told us the truth? I hope the rich bosses are happy while we suffer.”
Announcing the collapse of the company, father-of-three Dr Fankhauser said: “I know that this outcome will be devastating to many people and will cause a lot of anxiety, stress and disruption.
“Although a deal had been largely agreed, an additional facility requested in the last few days of negotiations presented a challenge
that ultimately proved insurmountable.
“It is a matter of profound regret to me and the rest of the board that we were not successful.”
But veteran market analyst David Buik said: “Let’s not mince words; this was, by any standards, a badly run company.
“One thing is for sure the senior management for years have never stinted themselves in terms of remuneration.”
Failure
Russ Mould, of investment platform AJ Bell, said: “Ultimately Thomas Cook failed because it didn’t have the cash flow to reinvent itself to fight off growing competition as so much money was going on debt repayments.”
The Insolvency Service said last night: “The Official Receiver has a duty to investigate the causes of failure of the company, including the conduct of directors, as part of the liquidation process.
“The Official Receiver has wideranging powers to obtain the information he needs to complete these investigations.”