The former boss of Thomas Cook has told MPs he was”confident” the travel giant would be saved.
Peter Fankhauser was grilled by the Business, Energy and Industrial Strategy Committee today in Westminster following the collapse of the 178-year-old travel business.
A number of former Thomas Cook cabin crew attended the hearing and watched on as Fankhauser told MPs he “tried to tackle the group’s debt pile” but admitted he “couldn’t do it quick enough”.
“I was confident Cook was going to be saved, otherwise I wouldn’t have tried so hard,” Fankhauser said. “I had backing from the banks and a substantial agreement with them and Fosun.”
Asked why Thomas Cook did not sell off assets to save the business, Fankhauser said neither selling off the airline or the Nordics business would have “provided enough value for stakeholders to agree to a deal”.
“We could have sold parts of the business – I don’t know how much Hays (Travel) paid for the retail chain in this state – but we explored every avenue and came to the conclusion we wouldn’t have been able to leave the rest of the business in a sustainable structure.”
He denied accusations from MPs the recapitalisation plan for Thomas Cook was “chaotic” and revealed one investor pulled out of the deal because its fund could only trade in publicly listed companies, after Cook warned it could be listed.
Fankhauser explained that Fosun was not willing to bridge the £200 million funding gap needed to save the business because it would have had to guarantee pensions, bond plan providers and the CAA.
Asked if he would hand over some of his pay and bonuses to help staff, Fankhauser said: “I don’t try to defend my pay in comparison to workers’ salary. That is not my intention what I can I worked exhaustively and extremely hard for my salary. I didn’t succeed and I said that I’m going to consider that. I’m not going to decide that today.”
Former chairman Frank Meysman was also called in front of the committee. He said he had served “with pleasure” and spent his money on buying shares in the group.
Former non-executive director Warren Tucker said with hindsight too much of the pay was related to profits not to cash flow generation.
It also emerged during the hearing that no UK minister contacted Thomas Cook in almost a week leading to its collapse.
The committee heard that ministers from Germany, Spain, Bulgaria, Turkey and Greece all made personal contact with the company.
The Transport Salaried Staff Association (TSSA) general secretary, Manuel Cortes, said: “The fact that no British minister contacted Thomas Cook during the six days before its collapse is utterly damning.
“We can’t have a business secretary that doesn’t bat for Britain, doesn’t lift a finger when 9,000 jobs are on the line. The public will be furious at this lack of action when the business could have been saved. Leadsom’s position is now totally untenable. She must walk or be fired.
“What we have learned today shows that while our government was prepared to write off this iconic British brand for ideological reasons alone several overseas governments were more than willing to help.”
The British Airline Pilots Association (Balpa) said answers given today by former Thomas Cook executives will have done little to comfort the staff who lost their jobs.
General secretary, Brian Strutton, said: “It is right that those at the top of Thomas Cook are held to account for the company’s collapse. Sadly, today, in response to excellent questioning by the committee, we heard lots of obfuscation, and precious little remorse from executives.
“We also place significant blame with the UK government who could have backed a temporary bridging facility to keep this company going, saving the thousands of jobs which have been lost.
“We continue to support Thomas Cook pilots in finding new work but the scars of this collapse will no doubt run deep with them for many years to come.”
Unite national officer for civil aviation Oliver Richardson claimed that transport secretary Grant Shapps had “a lot of questions to answer about his role in Thomas Cook’s collapse” in the wake of the select committee’s hearing.
“The way in which the government washed it hands of Thomas Cook is extraordinary and shocking.” Richardson said.
“The 3,000 Unite members, the majority of whom worked for the profit making airline, will be angry that they were sacked without warning and without pay, yet no government minister was even prepared to sit down with the company to discuss potential assistance.
“While other governments throughout Europe were prepared to support parts of the Thomas Cook business and to seek to alleviate the damage faced by their tourism and transport industries, our government had installed barriers to prevent direct meetings.
“There is no evidence that the DfT [Department for Transport] was ever fully across the detail of what Thomas Cook needed to stay afloat or even to assist in separating the profitable parts of the business, to allow for their survival.
“This appears to be a governmental failure on a grand scale.”