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BUSINESS NEWS COLLAPSE


THOMAS COOK


succeed. Te failure is devastating for everyone. I feel responsible.”


‘We explored everything’


Why did the company go into liquidation rather than administration, I ask, suggesting it might have been beter to fold earlier to avoid this outcome? He says: “Te directors explored everything.


When the deal fell apart, we could no longer trade because there were no assets. Te conditions to go into administration were not there any more.” Wasn’t the debt the overriding problem,


regardless of setbacks such as the 2018 heatwave? Fankhauser acknowledges: “Without the debt problem, probably the heatwave would not have knocked us off course. [But] in early 2018 we were in an excellent position. I had never been in a beter booking position.” Now the company’s collapse faces scrutiny by


regulators and MPs. Fankhauser insists he welcomes the scrutiny, saying: “I have to go before the [Commons] select commitee. I wrote to [chair of the commitee] Rachel Reeves to say she has my support.” He also appears unfazed by the Financial


payments position. Tat led us and our financial advisors to say, ‘We don’t need £750 million, we need £900 million’. “We made good progress. At the end of


August, we had substantive agreement on the key commercial terms.” But as August gave way to September, the


combination of debt, demands for upfront payments and withholding of incoming funds tightened around Tomas Cook like a noose. Fankhauser says: “We were fighting to the end.


We explored every avenue, selling the Nordic business, selling the German business.” At the end, the banks sought an additional


£200 million credit guarantee. Fankhauser says: “We asked the government [for a guarantee].” Te government declined. He notes: “[Cook’s German airline] Condor


got a loan from the German government. I did not ask for that. If I had, it would have been for less [than Condor].” Fankhauser insists: “I was convinced we could


Reporting Council’s (FRC) examination of Cook’s auditors. He says: “Te FRC investigation is standard when a public company fails. I’m happy that we will get transparency. Hopefully, things will become more fact-based.” Fankhauser says he accepts criticism of his salary


and bonus. His earnings over almost five years have been widely reported as £8.4 million. In fact, he was paid £4.3 million. Te other £4.1 million was in shares that were lost in the collapse. Te Financial Times noted his earnings were close to “the median pay for a FTSE 250 CEO over the past five years”. Yet he says: “Te figure is massive, I agree.” He


points out: “I did not pay myself. Half of it, I lost in shares. I never sold one share. But I agree, it’s a massive figure.” Te figures were touted again in interviews he


granted two newspapers at the end of September. Asked why he gave the interviews so soon aſter the collapse, Fankhauser says: “I didn’t want everyone talking about us and we did not have a voice. I did not want to hide.” He lights up when I ask about the reaction to


The CAA has done a great


job. The solidarity in the industry is breathtaking. I’m hugely grateful that all our competitors care so much about our people


travelweekly.co.uk


Cook’s failure. “Te CAA has done a great job,” he says, “and I’m really happy for that. Te solidarity in the industry is breathtaking. “I’m hugely grateful that all our competitors


care so much about our people. We had such great people, so passionate. It’s heartbreaking.” I point out he has refrained from apportioning


any blame to others. He says: “Te blame game does not help. I’m just terribly sorry.”


10 OCTOBER 2019 71 THOMAS COOK: 12 YEARS TO COLLAPSE


2007: Thomas Cook merges with MyTravel (Airtours); lists on London Stock Exchange


2008: Global financial crash. XL Leisure Group fails


2009: Recession; UK outbound travel numbers fall 20% from 2008 to 2010


2011: Cook takes over The Co-operative Travel, giving it 1,200-plus shops (July); issues third profit warning in 12 months (July); share price plummets; chief executive Manny Fontenla-Novoa resigns (August); new chairman Frank Meysman appointed (September); shares end year at 14p


2012: Meysman rejects £400 million rescue bid (March); Cook secures £1.4 billion refinancing (May); Harriet Green appointed chief executive (July); Cook reports £378 million loss


2013: Cook reports first operating profit in three years but overall loss still £283 million


2014: Green leaves abruptly; Peter Fankhauser takes over (November); £158 million full-year loss


2015: Fosun acquires 5% stake (March); beach massacre in Tunisia forces UK operators to withdraw (June); Cook reports £19 million profit


2016: Cook switches 1.2 million seats from Turkey to western Med; reports £205 million operating profit; pays shareholders first dividend in five years


2018: Group issues two profit warnings, blaming summer heatwave (September) and reclassification of ‘exceptional items’ (November)


2019: Cook puts airline up for sale (February); reports half-year loss of £1.45 billion after £1.1 billion write-down of ‘goodwill’ on MyTravel business (May); announces agreement in principle on takeover by Fosun, banks and bondholders, eradicating £1.6 billion debt (July); takeover value rises to £900 billion plus debt (August); Cook goes into liquidation after banks demand additional £200 million credit guarantee (September 23)


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