The cost of the Thomas Cook collapse will exceed £500 million, with taxpayers potentially meeting a large share of the bill.
Thomas Cook collapsed in September 2019, with many branches now under the Hays Travel brand
Government figures show the reimbursement of forward bookings under the Atol scheme will cost £420 million, in addition to the expected £100 million-plus repatriation bill, The Times reports.
The Air Travel Trust Fund, which reimburses Atol bookings, contains only around £170 million; with aircraft being brought in from as far afield as Malaysia and the US to repatriate Cook’s clients.
Added to this bill will be other costs such as statutory redundancy payments for Cook’s 9,000 UK staff.
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The cost of the Thomas Cook collapse will exceed £500 million, with taxpayers potentially meeting a large share of the bill.
Thomas Cook collapsed in September 2019, with many branches now under the Hays Travel brand
Government figures show the reimbursement of forward bookings under the Atol scheme will cost £420 million, in addition to the expected £100 million-plus repatriation bill, The Times reports.
The Air Travel Trust Fund, which reimburses Atol bookings, contains only around £170 million; with aircraft being brought in from as far afield as Malaysia and the US to repatriate Cook’s clients.
Added to this bill will be other costs such as statutory redundancy payments for Cook’s 9,000 UK staff.
Former Cook directors, including chief executive Peter Fankhauser, are likely to be called before the House of Commons business committee next month to explain how the £3.1 billion collapse occurred.
The inquiry will also examine the role of Cook’s auditors PwC and EY and executive pay.
Any impact on the CAA’s Air Travel Trust Fund, or “Atol” fund, will be made up – over time – by fresh contributions to the pot, currently set at £2.50 per Atol-protected passenger (APC).
The fund has recovered from serious dents in the past, such as when ILG collapsed. However, there has been debate in recent days about whether the contributions will be raised to mitigate the impact of the collapse of Thomas Cook.
Alan Bowen, legal advisor to the Association of Atol Companies, said: “Either we go for a wholesale review of how packages and flights are sold, or stick with what we have and perhaps raise the ATTF contributions to £10pp.”
Peter Bucks, chair of the government’s recent Airline Insolvency Review, told TTG: “Our research showed the £2.50 Atol contribution was well within the limits of what people would be prepared to pay for protection. The majority would be prepared to pay more – as much as £5.”
However, Travel Trade Consultancy director Martin Alcock said the CAA would be “reluctant to inflict higher APC on the sector”.
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