German carrier Condor’s escape from the impact of parent Thomas Cook Group’s insolvency has ignited fury from UK pilot representatives.
The UK government did not step in to offer bridge funding to Thomas Cook when it sought financial assistance during the late stages of negotiating a rescue deal with Chinese firm Fosun Tourism Group.
But the German federal and state governments have signalled that they will guarantee a loan to assist Frankfurt-based Condor, which will also take formal measures to protect itself from insolvency claims from its parent.
UK pilot union BALPA, while not begrudging Condor’s survival, has demand that Thomas Cook Group’s management explain why the UK’s Thomas Cook Airlines “had to be closed” while Condor was allowed to continue operating.
“How was it funded?” asks BALPA general secretary Brian Strutton. “Because it seems there is nothing left in the coffers for UK staff.”
Strutton also describes as a “national scandal” the UK government’s failure to support Thomas Cook Group while Fosun was offering to invest in the tour company.
Condor states that it is profitable, and Thomas Cook Airlines’ most recent full-year financial accounts show the UK carrier was also generating positive figures.
Thomas Cook Airlines made a pre-tax profit of nearly £130 million in the year to 30 September 2018.
Ironically its full-year accounts referenced the risk of additional financial burdens from the UK government’s independent review into airline insolvency – launched after the failure of Monarch Airlines in 2017 – which was subsequently published in May this year.
UK business secretary Andrea Leadsom has asked the Financial Reporting Council – which is considering whether there is a case to investigate Thomas Cook’s collapse – to prioritise its assessment.
She has also urged that the council examine “not only the conduct of those directors, past and present, in the preparation of the accounts, but also the conduct and practice of the auditors of those accounts”.
Leadsom has also sought assistance from the Association of British Travel Agents to support Thomas Cook customers enforcing their legal rights.
“Our aviation industry offers consumers choice and value – it is an open and competitive marketplace,” she wrote to ABTA chief Mark Tanzer on 23 September.
“Sadly, that means on occasion, companies will be forced to withdraw. It is important that we minimise the fallout for consumer confidence as a result of this situation.”
Source: FlightGlobal.com
