CAA silent over Thomas Cook financial analysts claim

The Civil Aviation Authority refused to comment on a report that it has appointed a US firm of financial analysts to advise it on Thomas Cook.

The Daily Telegraph claimed the CAA has engaged US specialists in corporate restructuring and administration Alvarez & Marsal to examine the implications of any further problems at Thomas Cook, after the group suspended publication of its annual results and sought an emergency extension of its banking facility late last month.

Thomas Cook signed a deal with its banks within days, granting it a £200-million loan facility, and has since insisted “it’s business as usual”. It is due to publish the delayed results and details of a turnaround plan next week.

The group is the UK’s second-largest holiday firm and the second-biggest in Europe.

The bulk of the holidays it sells are protected under the Atol scheme which ensures refunds and repatriation for customers in the event of financial failure. Because of its size, the group and its customers comprise one of the two biggest funders of the Air Travel Trust which pays out to consumers. Tui Travel UK (Thomson Holidays) is the other.

The CAA, which oversees the Atol scheme, refused to confirm or deny the appointment of Alvarez & Marsal. However, as the industry regulator the CAA has a duty to exercise financial oversight.

Alvarez & Marsal has a European division and a London office as well as experience of the airline sector, but the firm is not well-known in the UK travel industry.

The 17-strong syndicate of banks that provide facilities to Thomas Cook has already appointed Ernst & Young to advise it on the group’s restructuring plans. Thomas Cook has said it, too, will appoint an independent firm of advisors.

The CAA stressed: “Anybody who books an Atol-protected holiday can be confident their money is fully protected.”

The Air Travel Trust is insured against the unlikely event that one of the biggest Atol companies might cease trading, with a policy that applies in the case of a failure worth £50 million or more.

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