Thomas Cook collapse: former bosses berated by MPs

The travel firm’s agencies were sold for barely £10,000 each

A month after the collapse of Thomas Cook, two former chief executives and a former finance chief of the travel firm have been berated by members of the Business Select Committee.

MPs are investigating the collapse of Thomas Cook on 23 September, which cost 9,000 jobs and scuppered nearly one million holidays.

The committee summoned Manny Fontenla-Novoa, who was CEO of the travel giant from 2003 to 2011; his successor, Harriet Green, who ran the company from 2012 to 2014; and Bill Scott, who was chief financial officer during 2018.

Mr Scott told the MPs that hot weather in that year was partly to blame for Thomas Cook’s failure. He called it: “A once-in-a-generation heatwave that happened quite late in the booking cycle.

“There was a sudden and sharp decline in profitability from about June 2018.”

But the chair of the Business Select Committee, Rachel Reeves, said that Tui and Jet 2 had suffered from the same slump in demand without collapsing. With some exasperation, she said: “Everyone we’ve seen from Thomas Cook have blamed everybody apart from themselves.

“So it’s the volcanic ash, it’s the hot weather in the UK, it’s the depreciation of sterling, it’s the debts acquired to someone else.

“It would be really, really good for someone from Thomas Cook to say to your customers and your suppliers and your employees, some of whom are sitting here today: ‘We got it wrong. And I wish I could go back and do something different. I wish we had disposed of some assets. I wish we hadn’t bought MyTravel. I wish we had made different decisions’ – rather than just passing the buck to someone else.”

The former executives were asked to explain what they had got wrong.

Ms Green told the committee: “We started with some of these amazing Apple-type stores with lots of technology where people would queue in Lakeside [an Essex retail park] to make sure, with their augmented reality, that they could actually see the hotel where they would be staying in.

“I should have pushed that even harder and faster.”

Mr Scott said: “We should have gone more quickly, we should have got out of a cycle of restructuring, plan after plan after plan that we couldn’t get to the bottom of, we should have become a bit more digital, a bit more able to compete in the current landscape.

“It just wasn’t quick enough.”

Towards the the end of the session, Mr Fontenla-Novoa made an emotional statement.

“It’s incredibly sad the company has failed.

“It’s a company I worked with since I was 18, and worked my way up to became CEO.

“It’s a company I care deeply about.

“Do I regret things? Of course I regret things. I’m human, I made mistakes.”

Earlier, MPs questioned Dean Beale, chief executive of the Insolvency Service. He revealed that Hays Travel paid only £6m to acquire 555 Thomas Cook travel agencies – a cost per store just over £10,000 each.

Mr Beale said: “The assessment of the Official Receiver was that this was a good deal for creditors.”

He also said that paying “special managers” to help sort out the company’s affairs had cost £11m in the first three week of the liquidation.

There have been claims that Thomas Cook Airlines was profitable and should have been preserved as a going concern. But Mr Beale said that the airline had been deemed to be insolvent.