Former Thomas Cook boss apologises to MPs after company’s collapse

The former boss of Thomas Cook has said he is “deeply sorry” for the travel firm’s collapse.

Tuesday, 15th October 2019, 11:28 am
Former CEO of Thomas Cook Peter Fankhauser speaking to the House of Commons Business, Energy and Industrial Strategy Committee at Portcullis House in Westminster, during the inquiry into the collapse of the British travel operator. Picture: House of Commons/PA Wire

Ex-chief executive Peter Fankhauser told MPs that senior figures at the company regretted being unable to save the “iconic brand”.

Employees, customers and suppliers are among those affected by the failure of the firm.

Mr Fankhauser is one of five senior Thomas Cook figures giving evidence to the Commons’ Business, Energy and Industrial Strategy Committee.

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(left to right) Former Chair of Remuneration Committee at Thomas Cook Warren Tucker, former CFO of Thomas Cook Sten Daugaard, former CEO of Thomas Cook Peter Fankhauser and former chairman of Thomas Cook Frank Meysman, during the Business, Energy and Industrial Strategy Committee inquiry into the collapse of the British travel operator, at Portcullis House in Westminster. Picture: House of Commons/PA Wire

In his opening remarks, he said: “You heard me probably say it already, but I really want to repeat it in front of the members of the select committee, how deeply sorry we are that we couldn’t save this iconic brand and this company who has a long, long standing history in this part of the UK industry.

“I’m deeply sorry about this failure and I’m deeply sorry for the distress we caused to millions of customers who booked holidays with us and who were on holidays with us.

“I’m deeply sorry for our suppliers who were long-standing partners and who were loyal to us throughout this time.

“I’m especially sorry for all my colleagues who worked extremely hard and tirelessly to make Thomas Cook a better company.”

Mr Fankhauser said the summer heatwave of 2018 was the first major setback that eventually led to its collapse. Thomas Cook- the world’s oldest tour operator - collapsed with 20,000 jobs lost worldwide including 89,000 in the UK and 1,000 plus in Peterborough.

Mt Fankhausersaid: “The primary focus was to pay down the debt by generating cash.

“We were not fast enough in transforming the business partly because we were overtaken by events outside our control but as well partly because we had so much debt service to pay to the bank... £1.2 billion is a huge amount and that was constraining us in the speed of transformation.”

Mr Fankhauser said he tried to turn around the company after being appointed chief executive in 2012 by “transforming the business from an old-fashioned tour operator”.

He went on: “The pace we could do that was not fast enough. It was constrained by this huge debt paying. Since 2012 we paid £1.2 billion of interest costs and refinancing costs.

“Imagine if we could reinvest in the business only half of that, we could have been faster.”

Asked by committee chair Rachel Reeves if there was anything he should have done differently, Mr Fankhauser replied: “I’m generally a very reflective person and I have now had time to reflect what could I have done differently.

“If I could start from scratch, then I would have probably even pushed more on the pace, but it was difficult for me to find the balance between pace and the money you need to transform such a big business at pace.”

Mr Fankhauser revealed he had received offers for parts of the business prior to its collapse.

He told MPs on the BEIS select committee: “We could have sold part of it, we had offers for parts of it but none of them would have given enough value for the shareholders and stakeholders that they would have agreed on that.”

Questioning Mr Fankhauser in relation to his 2017 bonus worth more than half a million pounds in cash, Ms Reeves asked: “Do you think that that bonus should be paid back and maybe, if I could put it like this, be put to better purpose?

“It could be used to pay the redundancy pay. It could be used to compensate taxpayers who are now bailing out the company which you guided, and you guided in the end onto the rocks, Mr Fankhauser.

“Do you think that bonus should be paid back?”

Mr Fankhauser replied: “I fully understand the sentiment in the public and I understand the sentiment of some of our colleagues.

“However, what I can say to that is that I worked tirelessly for the success of this company and I am deeply sorry that I was not able to secure the deal.

“But it was not one-sided that I failed. There was multiple parties who had to contribute to the deal which finally then didn’t succeed.”

Ms Reeves told Mr Fankhauser: “Your apologies would perhaps ring a bit more true if you were willing to do something about it.

“At the moment I’m afraid, Mr Fankhauser, the number of times you’ve said sorry, it just rings rather hollow when you’re not willing to put something back.”

He responded: “In my reflections I will take that back, chair, and I will consider what is right, but I’m not going to decide that today.”