Could tax-payer bailed out banks bring down Peterborough's Thomas Cook?

An urgent plea has been made to the Government to ensure tax-payer supported banks do not bring down Peterborough-based Thomas Cook.

Friday, 20th September 2019, 2:05 pm
Thomas Cook is embroiled in a financial crisis which is feared could cause its collapse.

The appeal has been made by officials of the pilots' union BALPA who warn that 9,000 airline staff jobs will be lost if Thomas Cook collapses.

Their call comes after a last minute demand by Thomas Cook's banks, including RBS and Lloyds, that the cash-strapped tour operator stump up an extra £200 million.

This was despite the banks being part of discussions that seemed to have secured a £900 million rescue package involving the holiday giant's largest shareholder, the Chinese company Fosun.

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Peter Fankhauser, chief executive of Thomas Cook.

Thomas Cook is hoping to secure approval for the rescue package at meetings with stakeholders next week.

Both RBS and Lloyds had to be bailed out at a cost to the tax-payer of £65 billion with the state still being a majority owner - 62.4 per cent - of RBS.

It is feared the 178-year-old company - the world's oldest tour operator - could collapse by the weekend if the extra finance is not found.

BALPA general secretary Brian Strutton said: "It is appalling that banks that owe their very existence to handouts from the British taxpayer, show no allegiance to a great British company, Thomas Cook, when it needs help.

"This puts 9,000 good quality U.K. jobs needlessly at risk and puts an iconic British brand in jeopardy.

"The Government has a say in this, owning one of the key banks and still with huge influence over the other. #

"RBS and Lloyd’s should be told by the Prime Minister to support Thomas Cook.

He added: "If Thomas Cook goes into administration it will cost the taxpayer as much to repatriate holidaymakers as it would cost to save Thomas Cook; the Government sat on the sidelines wringing its hands when Monarch Airlines was let down by its financiers, this time Government needs to get a grip and do its bit to save Thomas Cook.”

Directors of Thomas Cook are involved in a hectic rounds of meetings talking to everyone with a stake in the company as they seek to find the extra £200 million, which has been dubbed a seasonal standby.

It is understood bosses have been left stunned by the last-minute demand from the banks, which had been involved in all the discussions with Thomas Cook and Fosun.

The shock announcement comes five months after Thomas Cook, which employs 1,000 people at Westpoint, Lynch Wood in Peterborough, and about 22,000 people across 16 countries, announced a £1.5 billion loss blaming a hot summer, customers demand for online bookings and Brexit for some of its woes.

An RBS spokesman said: “As one of a number of lenders, RBS, has provided considerable support to Thomas Cook over many years and continues to work with all parties in order to try and find a resolution to the funding and liquidity shortfall at Thomas Cook.”