The government’s refusal to step in to save Thomas Cook was “politically questionable”, according to MP Luke Pollard, former Abta head of public affairs.
Writing for this morning’s Travel Weekly Business:am, Pollard suggests the decision “went all the way to Downing Street” and he notes: “Taxpayers are being landed with a bill on top of the costs of many thousands being made jobless.”
The Thomas Cook board sought a government loan guarantee to secure an additional £200 million credit facility as it fought to finalise a £2.5 billion rescue deal in the hours before it went into liquidation.
The Department for Transport declined to step in and business secretary Andrea Leadsom reportedly declined to meet representatives of the company.
At the same time, the DfT authorised the CAA to repatriate all Thomas Cook customers overseas regardless of whether their flights were Atol-protected – just as it did when Monarch failed two years ago.
Pollard asks: “Were ministers aware that the costs of not stepping in would exhaust the protections in place?
In the aftermath of the collapse, he wonders: “Will ministers now finally update their airline insolvency policy to state clearly that everyone will be brought home in the event of a collapse?”
Pollard suggests there is “a growing consensus that a form of Chapter 11 bankruptcy protection for airlines should be introduced [and] German and US models are being looked at”.
He says: “An all-flights levy is back on the table. Airlines will squeal but, as they keep going bust, they have few friends in this argument.”
In the circumstances, Pollard argues: “It’s more important than ever that the holiday sector does not sit on its hands. We need the sector to be loud and vocal about what lessons need to be learned.”
More: Comment: How will government react to Thomas Cook collapse?