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Collapse of Thomas Cook cost taxpayer £156m, report says

Collapse of Thomas Cook cost taxpayer £156m, report says

Thomas Cook

2 min read

Taxpayers forked out at least £156million over the collapse of Thomas Cook and repatriating 150,000 stranded passengers.

The National Audit Office (NAO) said the final figure may rise further still, after the 150-year-old travel agency ceased trading in September 2019, leading to the loss of 9,000 jobs. 

After talks to keep it afloat failed, the Department for Transport instructed the Civil Aviation Authority (CAA) to bring back those stuck abroad in 18 separate countries, leading to 746 repatriation flights from 54 airports.

A new NAO report finds that around 40% of those passengers were not covered by the ATOL industry insurance scheme, with the Government agreeing to pay an estimated £83million reimbursing airlines to get Brits home.

But the official auditor says the final cost of the repatriation may not be known for some time as the CAA “will continue to receive for some months invoices for leasing planes, ground handling charges, and other services”.

And in addition to those costs, other parts of government are expected to face charges of at least £73million - including at least £58million of redundancy and related payments to Thomas Cook’s former employees, and at least £15million for the costs of liquidating the firm, though again the figure could be higher once the Official Receiver finishes his work.

The CAA has estimated the total exposure of the Thomas Cook collapse to the Air Travel Trust Fund, which pays for flights covered by ATOL, will be £481 million. 

Labour MP Rachel Reeves, who chairs the business select committee, said the report "highlights again the sad reality that it is the taxpayer who is on the hook for Thomas Cook’s demise".

She added: “Directors and senior management at Thomas Cook were responsible for the collapse but it’s the taxpayer who is left to pick up this hefty tab involved in the repatriation and insolvency costs.”

The Labour MPs said she hoped the NAO report served as a reminder to Peter Fankhauser, the former CEO, to “put his hand in his pocket and return some of this money”.

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