Thomas Cook: PM hints at travel protection overhaul

Prime minister Boris Johnson has suggested an overhaul of travel protection mechanisms in the wake of the Thomas Cook failure.

Speaking to reporters while flying to the UN general assembly in New York, Johnson said it did not seem the government could have done more to help, for example agreeing to Thomas Cook’s request for a bailout.

He told The Guardian: “It is a very difficult situation, and obviously our thoughts are very much with the customers of Thomas Cook, the holidaymakers, who may now face difficulties getting home.

“We will do our level best to get them home. There will be plans ready to deal with that if it is necessary.”

On the request for government funding, he said: “Clearly, that’s a lot of taxpayers’ money and sets up, as people will appreciate, a moral hazard in the case of future such commercial difficulties that companies face.

“I do think that we need to look at ways in which tour operators, one way or another, can protect themselves from such bankruptcies in future.

“And clearly the systems that we have in place to make sure that companies like Monarch or Thomas Cook don’t in the end come to the taxpayer for help, one way or the other, the state will have to step in to help stranded holidaymakers.

“One’s driven to reflect on whether the directors of these companies are properly incentivised to sort such matters out.”

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In its response to the collapse of Thomas Cook, the government said: “For flights back to the UK, it doesn’t matter whether customers are Atol protected or not, or what their nationality is.

“Everyone on a Thomas Cook holiday with a return flight to the UK within two weeks will be brought home.

“Under normal circumstances, passengers who are not Atol protected would be asked to find, and pay for, their own way home.

“However, given the extent of the disruption the government is stepping in to assist impacted passengers and get people home.”

Johnson’s comments came as On the Beach Group warned of a knock-on financial impact from the Thomas Cook Airlines collapse.

The online travel retailer said: “On the Beach is assisting customers that are currently in resort and whose travel plans will be affected.

“The board anticipates that there will be a one-off exceptional cost associated with helping customers to organise alternative travel arrangements, and lost margin on cancelled bookings.

“The group expects to be able to recover the costs of the cancelled flights via chargeback claim – as was the case for the Monarch failure in 2017.

“This one-off exceptional will be booked in the current financial year.

“The board is currently evaluating the potential effects of the failure on its forecasted performance for the year ending 30 September 2020, and a further update will be provided when appropriate.”

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