Thomas Cook: Boris Johnson lashes out at travel bosses who 'pocket large sums as firms go down the tubes'

Failed firm’s directors facing investigation over conduct prior to insolvency

The original package holiday firm has gone bust (EPA)

Boris Johnson has criticised travel firm bosses for paying themselves millions of pounds as their businesses “go down the tubes”, following the collapse of Thomas Cook.

The prime minister spoke out as a mammoth operation was launched to fly home 150,000 British holidaymakers left stranded by the demise of the 178-year-old company.

Mr Johnson also defended the government’s decision not to bail out Thomas Cook with £150m in funding and hinted that tour operators should insure themselves against collapse.

“I think the questions we’ve got to ask ourselves now are how can this thing be stopped from happening in the future?” he told reporters in New York.

“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?

“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.”

Some 600,000 holidaymakers woke up in beachside hotels on Monday to discover that their travel company had vanished overnight after rescue talks failed.

An estimated 21,000 Thomas Cook employees worldwide, including 9,000 in Britain, are now looking for work – just as the demand for travel staff dwindles as the summer season comes to an end.

Mr Johnson’s comments came as Andrea Leadsom, the business secretary, asked the official receiver to investigate “the conduct of directors prior to and at insolvency”, and “whether any action by directors has caused detriment to creditors or to the pension schemes”.

The UK government has now launched “Operation Matterhorn” to fly home the overseas holidaymakers that are British – in what will be the biggest peacetime repatriation.

Some passengers have complained of long queues and disruption at airports, but transport minister Grant Shapps insisted the operation was “running smoothly”.

The operation dwarfs the airlift carried out two years ago when Monarch Airlines failed.

Fifty-one planes, including an Airbus A380 “Superjumbo” and Boeing 747, have been chartered.

Thomas Cook had spent the weekend trying to shore up its finances. A complex deal embracing its creditors and the Chinese conglomerate, Fosun, had promised £900m of “new money” in exchange for ownership of the company.

But barely a week before the rescue plan was due to be signed off, the lending banks demanded that Thomas Cook establish a £200m line of credit to cover losses in what was anticipated to be a dismal winter for travel firms. The government failed to step in.

At the CAA headquarters in central London, a “war room” has been established to coordinate the repatriation.

CAA chief executive, Richard Moriarty, said: “We have launched, at very short notice, what is effectively one of the UK’s largest airlines.

“The nature and scale of the operation means that unfortunately some disruption will be inevitable. We ask customers to bear with us as we work around the clock to bring them home.”

Mr Shapps said: “Our contingency planning has helped acquire planes from across the world – some from as far away as Malaysia – and we have put hundreds of people in call centres and at airports.”

The basic idea is to mimic the Thomas Cook schedule of flights. But with a mix of aircraft that have very different capacities to the defunct company’s fleet, managers of the “pop-up” airline are combining some flights and splitting others, with some passengers facing long journeys by coach once back in Britain to return to the airport from which they originally flew.

On day one, 64 missions were flown, carrying an estimated 15,000 passengers.

Meanwhile, 800,000 UK customers of Thomas Cook with future bookings began the process of obtaining refunds – which could take two months or longer.

Fares on other airlines and prices for alternative package holidays soared on a surge in demand from people determined to travel.

Thomas Cook’s closest rivals, easyJet and TUI, saw their share prices soar – up 5 and 7 per cent on the day.

The market view is the removal of a giant competitor will allow these and other travel companies to increase prices over the winter and beyond.

Mark Tanzer, chief executive of the travel association, Abta, said: “Along with many others in the industry, I am extremely saddened by today’s news about the demise of Thomas Cook.

“It is one of the UK’s most iconic travel companies and today thousands of staff are facing losing their jobs.”

Thomas Cook was mired in debt at the time of its failure, and has very little of value beyond its take-off and landing slots at key hubs – notably Gatwick, the busiest single-runway airport in Europe. The portfolio of slots could raise £50m.

Governments of Thomas Cook’s destination countries expressed alarm at the collapse of the company.

Tunisia, in particular, has been reliant on the company for rebuilding its business from the UK. Tens of thousands of winter holidays to the North African nation have been cancelled, with little prospect of other airlines adding capacity to make up for Thomas Cook’s demise.