Thomas Cook bosses may have known more than a month ago that the travel giant was on the verge of collapse, it emerged on Tuesday night.
The true state of the 178-year-old company’s precarious finances became public knowledge last Thursday, sparking panic among investors.
Leaks to the media revealed that Thomas Cook needed an extra £200million to secure a rescue deal. The firm collapsed in the early hours of Monday morning, leaving more than 150,000 customers stranded and sparking the UK’s biggest peacetime repatriation.
Thomas Cook was still selling flights and holiday packages online as late as Sunday night – just hours before it collapsed.
Now, as tens of thousands of holidaymakers wait to be taken home, the spotlight is on the bosses who ran the firm into the ground.
Passengers line up in front of Thomas Cook counters at the airport of Heraklion, on the island of Crete, on Tuesday, September 24
Business Secretary Andrea Leadsom (pictured) has called for the Insolvency Service to launch a ‘fast track’ investigation into the firm’s demise, likely to examine exactly what bosses knew – and when
Business Secretary Andrea Leadsom has called for the Insolvency Service to launch a ‘fast track’ investigation into the firm’s demise, likely to examine exactly what bosses knew – and when. In a witness statement to the High Court on Sunday, Thomas Cook head Peter Fankhauser claimed the company’s lenders demanded more money to secure its future just two weeks before its collapse.
This led to frantic talks with City investors and the company eventually begging the Government for financial support, Mr Fankhauser said. But it last night emerged that the lenders, including Royal Bank of Scotland (RBS) and Lloyds Bank, had called for the extra funding at the beginning of August in a report circulated by their advisers.
Sources close to the banks have questioned why Thomas Cook did little to plug the gap earlier. Under strict UK stock market rules, companies must declare important information that could affect their share price.
The firm’s shares crashed by more than a fifth when it finally disclosed the demand for an extra £200million last Friday – but only after reports that it was on the brink of collapse were leaked to the media the day before.
Last night, veteran MP Frank Field, chairman of the work and pensions committee, said: ‘If this is true, either the finance officer at Thomas Cook is completely incompetent or was dissembling the truth. People got huge salaries because they claimed to be incredibly good at their job.’
The contradictory accounts of the events have kicked off a spat between Thomas Cook’s board and the lenders, which – until recently – were due to help the stricken travel agent secure a major rescue deal.
Sources close to the banks have claimed this was flagged to Thomas Cook as early as the beginning of August. But Chief Executive Officer Peter Fankhauser (pictured) said they suddenly insisted the extra £200million was essential on September 9, giving the firm little time to find an investor to stump up the cash
The planned bailout, which also involved Chinese tourism firm Fosun and a group of investors who held the company’s bonds, originally involved £900million of new money being ploughed in to the travel agent.
But as worries grew about the troubled company’s financial position, RBS and the other banks suggested an extra £200million be added to the deal to ensure Thomas Cook could keep going through the slow winter months.
Sources close to the banks have claimed this was flagged to Thomas Cook as early as the beginning of August. But Mr Fankhauser said they suddenly insisted the extra £200million was essential on September 9, giving the firm little time to find an investor to stump up the cash. According to Mr Fankhauser’s statement, made when he applied to put the business into liquidation on Sunday, the banks expected the money to come from Fosun.
But the Chinese giant, which also owns Wolverhampton Wanderers Football Club, was unwilling to write out any more cheques on top of the £450million it had committed.
The crumbling firm is now facing a series of investigations into its collapse. One trade union, the Transport Salaried Staffs’ Association, has called for an urgent inquiry into Thomas Cook’s collapse. Its director general, Manuel Cortes, believes rival Tui may now hold a dangerously large share of the British travel market.
We were locked out, confronted by security guards and refused food
Thomas Cook holidaymakers were locked out of their hotel rooms and denied food and drink unless they paid thousands of pounds extra on top of their pre-paid bills.
British tourists in Ibiza, Tenerife, Mexico and Fuerteventura were threatened with eviction from accommodation, leaving them facing the prospect of being stranded abroad without anywhere to stay.
Desperate hotel chains sought to claw back debts left by the collapsed tour operator by demanding cash from holidaymakers who had already paid for their trips, locking them out of their rooms until they agreed or left.
It came as the huge operation to repatriate more than 150,000 tourists stranded abroad by the chain’s collapse continued yesterday.
Sam Emerton, 24, (pictured) from Milton Keynes, Buckinghamshire, told how when he and his girlfriend Shaylee arrived at their hotel in Fuerteventura on Monday staff demanded they hand over £1,100 – on top of the £1,700 they had already paid
Around 74 flights with 17,000 people came back to the UK yesterday following the 64 flights with 15,000 on Monday.
Meanwhile a holidaymaker told how a hotel brought in security guards at one point as staff forced tourists to hand over credit card details.
Hayley Hook, who is on holiday with her family in Greece, said the guards appeared as her hotel demanded £44 per person per night – and said they would not get food and drink unless they paid.
Deborah Allett, 61, who is on holiday in Tenerife with her partner Robin Brasher, 61, and friends Tracey Frost, 55, and Peter Noble, 58, moved out of their hotel into nearby apartments when they refused to pay an additional £2,000 between them.
Miss Allett, a grandmother-of-two, said: ‘The thuggish behaviour of hotel staff was disgusting. They even blocked our cards so we couldn’t order any food or drink – which we had all paid for.
‘Fortunately we were able to find apartments nearby at a reasonable rate, because there was no way I was giving more money to that hotel.’
Hayley Hook, who is on holiday with her family in Greece, said the guards appeared as her hotel demanded £44 per person per night – and said they would not get food and drink unless they paid
Sam Emerton, 24, from Milton Keynes, Buckinghamshire, told how when he and his girlfriend Shaylee arrived at their hotel in Fuerteventura on Monday staff demanded they hand over £1,100 – on top of the £1,700 they had already paid.
Mr Emerton, a police control room worker, said: ‘We just felt so helpless. We handed over around £150 initially, just to access the hotel for one night as we couldn’t pay the full amount and didn’t know what to do. They continued to ask for the rest of the money, so I’ve had to borrow it from my dad. This shouldn’t really be happening, We paid £1,700 for this holiday when we booked back in March.
‘We’re lucky enough that my dad was able to loan me the money and we can now enjoy the rest of the week. But other people won’t be as lucky – and what are they supposed to do? It makes you very anxious, turning up and being told you have to hand over loads of money when we’d paid for an all-inclusive trip.
A great-great grandfather was three times locked out of his hotel room – which had his lung cancer medication inside – because he refused to pay an extra £900.
Allan Hopkins, 73, from Merthyr Tydfil, was blocked from entering his room at the Hotel Troya in Tenerife yesterday. He said: ‘Luckily I explained the situation and they let me back in, but it could have been awful.’
Other furious guests at the same hotel booked alternative accommodation when they were locked out and told to pay thousands of pounds extra. Lesley Mance, 29, an assistant accountant from Reading, Berkshire, paid £2,000 for herself and three other guests to remain in their rooms.
Deborah Allett, 61, who is on holiday in Tenerife with her partner Robin Brasher, 61, and friends Tracey Frost, 55, and Peter Noble, 58, moved out of their hotel into nearby apartments when they refused to pay an additional £2,000 between them
She said: ‘They had locked the doors, disabled our key cards – there was no other option.’
Thomas Cook guests at the Catalonia Yucatán Hotel in Riveria Maya, Mexico, were also told they would have to pay for their holidays again or face eviction.
Chas Reen, his partner Irene Tanner and her brother David, all from Swansea, were forced to pay £1,100 at the desk of the Hotel Y Muerta in Ibiza, despite having already paid Thomas Cook £1,100 for their holiday.
The group flew to the Spanish holiday island from Bristol at 6.30am on Monday morning, after Thomas Cook collapsed through the night. They were allowed to board as their flights were with Ryanair. Mr Reen, 69, a retired salesman, said the group did not discover Thomas Cook had collapsed until they arrived in Ibiza.
‘We got to the hotel desk and it was a case of, ‘if you don’t pay, you don’t stay,’ he said.
‘The woman said she wasn’t expecting us. She said as far as she was concerned we wouldn’t be staying because the hotel hadn’t been paid by Thomas Cook.
‘I said: ‘Are you trying to say we can’t stay?’ She said: ‘Yes.’
Cabin crew had to fund their own flights home
THOMAS Cook cabin crew were told to pay for hotels and flights home out of their own pockets after they were left stranded at airports in the US.
Nine flight attendants, two captains and a first officer were evicted from the Sahara Hotel in Las Vegas on Monday evening and left to find their own way home.
The captain’s company credit cards were cut off with immediate effect, meaning the crew had to pay for food, drink and spare clothes. They would have had to pay around £64 each to stay in a budget hotel for a night but a local Virgin Atlantic supervisor stepped in and picked up the bill.
Former cabin crew worker, Jenna Kenny, 31, (right) said yesterday: ‘Thomas Cook have been utterly despicable, heartless and selfish. While their bigwigs are pocketing millions, thousands of us will not get paid any wage at all on Monday’
They made their way to the airport yesterday but claim they were told by British Airways that they would have to pay £8,000 each for tickets on their next flight back to London. Last night BA agreed to fly the Las Vegas crew back to London. Most of the cabin crew arrived in the US with nothing more than their uniforms, a change of clothes and some bare essentials.
Many are single mothers who were banking on being back in time to look after their children.
Former cabin crew worker, Jenna Kenny, 31, said yesterday: ‘Thomas Cook have been utterly despicable, heartless and selfish. While their bigwigs are pocketing millions, thousands of us will not get paid any wage at all on Monday.
‘I have worked for the airline from the age of 18 and the loss is like nothing I’ve experienced before – it is truly like a bereavement.’