MIAMI — Following the collapse of Thomas Cook Airlines, passengers received the news that refunds for their disrupted holidays might come after a two-month wait.
Earlier today, an announcement by the auditors was made noting that an investigation is ongoing following the protests of hundreds of Thomas Cook employees.
The airline’s staff, who protested at the conservative party conference in Manchester this week, claim that they don’t understand how the group’s other European carriers (namely, Condor in Germany) are continuing to fly when the UK based carrier has been left to die.
Following these protests, a legal challenge has been announced after hundreds of Thomas Cook staff signed on to take legal action against the company, following claims that the airline has not fulfilled its duties as an employer.
The challenge is being fronted with the union Unite, which is expected to sign around 100 more crew before the end of the week.
So how did we get here?
The warning signs that the company was struggling had been around since 2018, and it is clear to see that this will not just be another airline that disappears, as its collapse seems to be more personal.
While many people may compare the collapse of Thomas Cook as a Monarch-like an outcome, it is unfortunately not the case. The knock-on effect that the loss of this airline will have is undoubtedly larger than that of Monarch, and it raises serious questions about how the company was being handled, to begin with.
After the company collapsed, there was an announcement made by the UK parliament Business, Energy and Industrial Strategy Committee (BEIS) that they would be looking into the case.
Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy (BEIS) Committee said, “Amid the frustration of holidaymakers and the misery of thousands of staff losing their jobs, the collapse of Thomas Cook has uncovered what appears to be a sorry tale of corporate greed, raising serious questions about the actions of Thomas Cook’s bosses and their stewardship of the business.”
Reeves added that this latest corporate failure “has shone a light once again on the use of aggressive accounting methods to aid bumper pay-outs to company executives and the apparent inability of auditors and regulators to curb these practices in the wider interests of shareholders, investors, and the public.”
“The BEIS Committee has a long-standing interest in corporate governance, executive pay, and audit reform which we are keen to follow up in this inquiry. The main players in the sad demise of Britain’s oldest travel firm should face public scrutiny and be held to account for their actions before the company collapsed,” Reeves said.
The inquiry will be looking to question the Thomas Cook CEO, Finance Director and Chairman, as well as the Thomas Cook Auditor PwC and EY.
Regulators and airlines working hard to fix the mess
We have all seen the reports and images of the CAA working around the clock to bring home stranded passengers and crew with the UK regulator going as far as leasing an Airbus A380 from Malaysia Airlines to help ferry stranded passengers and crew back from Spain to Manchester.
In addition to this, we have seen many airlines including Virgin Atlantic and British Airways working alongside the CAA to help bring back stranded crew from destinations around the world.
The problem still remains, however, that in addition to all fo the EU compensation laws that the Thomas Cook needs to adhere to for passengers, they must also work quickly to pay all of its staff the money they are owed.
On top of the Government inquiry and the FIC’s inquiry into the financial regulators, it is now believed that many Thomas Cook crew have signed on to take legal action against the former airline for failure to provide them with prior notice and failing to plan for the collapse of the company.
So what can we expect to see next?
Only time will tell on the outcome of the inquires and the legal challenges being faced by Thomas Cook. At the time of writing, we are unable to provide details on the extent of the actions being taken.
What we do know, however, is that this will be one of the biggest investigations and legal action cases ever taken against and airline in the UK, and only time will tell on the full knock-on effect of the company’s collapse in the coming months.