The Unite union has urged the government to reform insolvency legislation to allow airlines facing financial difficulties to continue operating in “protective administration” rather than just letting them collapse into insolvency.
Thomas Cook Airlines’ German and Scandinavian sister airlines have been able to continue operating in recent days despite the collapse of Thomas Cook Group on Monday (23 September), whereas the UK-based carrier has ceased flight operations.
On Wednesday (25 September), Cook’s German carrier Condor confirmed it had been granted a €380 million “bridging loan” by the German government allowing it to maintain operations through the winter while it seeks a buyer.
In 2017, the German government decided to tide over Air Berlin when it collapsed to ensure its passengers could be repatriated using the airline’s own aircraft, rather than there having to be a formal repatriation operation operation akin to those convened following the collapse of Monarch and then Thomas Cook Airlines.
Such reforms were a central tenet of the Airline Insolvency Review, which intimated in its final report to ministers in May the Air Berlin approach would be achievable in the UK with a range of relatively minor tweaks to current insolvency legislation.
“The government must learn the lessons of the collapse of Monarch and the profitable airline arm of Thomas Cook,” said Unite assistant general secretary Diana Holland. “We need to put in place arrangements that avoid UK airlines collapsing at huge cost to the taxpayer, workers and customers alike.
“The Scandinavian and German subsidiaries of Thomas Cook are still flying. Ministers must legislate as necessary to allow UK airlines in financial trouble to trade in protective administration. Other countries do it as a matter of course. We should do it in the UK.”