Thomas Cook collapse: 'fat cat' pay row as repatriation continues - business live

The Guardian Finance 2 months ago

Speaking on BBBC Breakfast, Dame Deirdre Hutton said:

“It’s a two-week operation, that’s mainly because people go on holiday for two weeks, so we want everybody to continue to enjoy their holidays and we’ll bring them back on the day they were going to come back anyway.”

“I’m really pleased that the first day went well, we got back 95% of those we were intending.

There were some operational difficulties and we’ll continue to have that ... there’ll be some bumps in the road and if people could bear with us, but we have got off to a reasonable start which is very good.”

There’s nobody abroad who should have been home. We’re bringing people back when their holiday ends, so we’ve got another 135,000 people to bring....We’ve done 8% so far, we’ve got 13 days to go, so it’s still a big operation.”

We heard yesterday that around 30 holidaymakers in Tunisia were sent back to their hotels, because there wasn’t enough space for them on the repatriation flight.

There were also long queues and delays at airports such as Mahón, Menorca and Palma, Mallorca, in the Balearic Islands.

It is planning to run another 74 flights today, which should transport another 16,800 passengers at the end of their holidays.

However, some passengers will not be landing where they expected.

For example, flight MT1217 was due to land at Gatwick, but is instead being sent to Manchester. That means a long coach ride down to London to complete the journey.

Photograph: CAA
Passengers wait to be helped at Palma airport on Monday Photograph: Cati Cladera/EPA

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The management of Thomas Cook are facing serious questions over the pay today, after the world’s oldest tour operator collapsed - triggering Britain’s biggest peacetime repatriation ever.

As the first planes brought thousands of holidaymakers back to the UK, with heavy delays at some airports, accusations of ‘fat cat’ incompetence rained down on the company.

Boris Johnson led the criticism, questioning why business leaders get away with paying themselves “large sums of money” as their business goes “down the tubes”.

Speaking in New York, at the UN climate summit, the PM said:

“I think it is a bit bewildering that you can have 160,000 people stranded.

“It’s not possible for me to know exactly what happened with the directors of the board of Thomas Cook and how it came about when they paid themselves x, y or z.

“But we’ve got to have a system in the future whereby we make sure that tour operators are in some way prevented from simply going belly up and then requiring the taxpayer to bring everybody home.”

British passengers wait for news on cancelled Thomas Cook flights at Palma de Mallorca airport yesterday Photograph: Francisco Ubilla/AP

Estimates vary, but we’ve calculated that the three executives who led Thomas Cook over the last 12 years earned around £35m between them.

Manny Fontenla-Novoa, who led the acquisition spree that saddled the company with more than £1bn of debt, was handed more than £17m in just over four years as boss of Thomas Cook, boosted by bonuses awarded for slashing 2,800 jobs following the merger with MyTravel. He quit in 2011 as the tour operator came close to collapse.

His successor was Harriet Green, who was paid £4.7m for less than three years plus a share bonus worth a further £5.6m. She handed a third of that award to charities after the deaths of two children from carbon monoxide poisoning in Thomas Cook accommodation in Corfu.

Green also claimed £80,000-a-year to cover her hotel bills at the five-star Brown’s hotel in London, where she lived during the week.

Peter Fankhauser, who was in charge when the company collapsed, was handed £8.3m, including £4.3m in bonuses.

The government has already ordered a probe into the firm’s collapse, so the Insolvency Service will examine why Thomas Cook collapsed in a mountain of debt, and whether directors are to blame.

Johnson and colleagues are also facing criticism, though, after refusing to help Thomas Cook by handing it a £200m lifeline. Some argue that this wouldn’t have addressed the company’s problems, but it appears to have scuppered rescue efforts led by Spain and Turkey.

Meanwhile, Civil Aviation Authority staff will continue to mobilise planes to get Thomas Cook’s customers home -- with around 150,000 holidaymakers abroad yesterday when the firm sunk.

They’ve all been promised they’ll be brought home, but it could be a tricky process -- with plenty of delays and confusion reported yesterday.

British passengers queue up in a check-in service at Dalaman Airport, Turkey, last night . Photograph: Ümit Bektaş/Reuters

Also coming up today

While Thomas Cook customers trudge home, City traders will be watching the Supreme Court which will rule whether Boris Johnson misled the Queen to suspend parliament.

New USA and German confidence data could be interesting too, as worries of an economic downturn swirl after weak factory production figures on Monday

The agenda

  • 9am BST: IFO survey of German business confidence
  • 9.30am BST: UK public finances for August
  • 3pm BST: US consumer confidence for August

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