Other airlines could follow Thomas Cook into liquidation because of growing pressure on the travel industry, the author of a government review of aviation has warned.
Peter Bucks was commissioned to examine the industry following the collapse of Monarch Airlines in 2017 and his report, published in May, includes recommendations intended to ensure consumers and the taxpayer are protected when airlines go bust.
Thomas Cook fell into compulsory liquidation last month, leaving more than 150,000 passengers stranded abroad and 360,000 more seeking refunds for future bookings.
The Civil Aviation Authority has launched a repatriation scheme that is estimated will cost the taxpayer £100m.
In his first interview since the collapse Mr Bucks told Sky News that, while airline failures are rare, market conditions may put others at risk.
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“Those [companies] that have well-structured finances should be able to weather the storms – there have been some in the last 12 months and may well be some more – rising oil prices, falling value of the pound and so on – but some of the weaker ones may not. I don’t want to name names, I can’t make predictions, but I don’t think it’s all over yet.”
His comments came as it emerged that Thomas Cook lobbied against one of his key proposals intended to protect customers and taxpayers from the impact of an airline collapse.
The Bucks review recommended changing insolvency law to allow airlines to continue flying for a short period after they go bust to help repatriate passengers, rather than fleets being immediately grounded.
It also proposed UK airlines pay a compulsory levy of less than 50p per passenger to fund an insurance scheme that would help offset the cost to the taxpayer in the event of future collapses.
Sky News can reveal that in its submission to the review Thomas Cook said it “would strongly discourage any proposal of a state sponsored mutual insurance undertaking, where customers pay a levy on travel products that would then feed into a fund used to pay refunds and repatriation costs”.
Mr Bucks defied these objections to include the measure in his report, and welcomed indications from Transport Secretary Grant Shapps that the government intends to implement his recommendations.
“It [a collapse] clearly could happen again, and if it were to happen again, the government faces a clear choice,” Mr Bucks said. “They can leave things as they are and every so often they will get a Monarch or a [Thomas] Cook and have to step in and write out big cheques.
“Or they can change it and at least protect the taxpayer from the overspill of those costs and protect government itself from the need to intervene and protect passengers so that they can have confidence that when they fly, if the worst happens, they will get home.
“We came up with a set of recommendations which were pragmatic and incremental, not radical, not revolutionary. They were intended to be practical, affordable and effective. I was confident when I submitted the report what they would do, that they meet those objectives and I remain so.
“Clearly there is a problem which will crop up from time to time. These things are quite rare, but unfortunately, we’ve had two big ones within the space of two years. The probabilities are actually quite low.”
Former Thomas Cook staff will lead a protest at Downing Street on Wednesday where they will present petitions calling for a full inquiry into the company’s collapse, and for the government to ensure workers receive unpaid wages.
Union Unite, which represents many staff, said the government should have intervened to ensure the profitable Thomas Cook airline continued to fly, as was the case in Germany.
In a statement Unite said: “The fact that workers are coming to parliament from all parts of the UK demonstrates just how angry workers are with the government which they rightly believe has abandoned them.
“This week workers have been left with no income as their wages were not paid.
“Workers do not understand how the profitable Thomas Cook airline was allowed to collapse while the European subsidiaries were able to continue to fly.”
