THOMAS COOK GROUP

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Thomas Cook : Investigation into government's response to the collapse of Thomas Cook

03/19/2020 | 05:04am

The National Audit Office (NAO) scrutinises public spending for Parliament. Our public audit perspective helps Parliament hold government to account and improve public services.

This investigation examines the government's response to the collapse of Thomas Cook.

Background to the report

On 23 September 2019, Thomas Cook UK confirmed that 26 of its companies had stopped trading, including Thomas Cook Airlines. Thomas Cook filed for compulsory liquidation and the Official Receiver was appointed as liquidator of the companies. All Thomas Cook flights and holidays were cancelled, leaving an estimated 150,000 Thomas Cook customers overseas in 18 countries. Since the commencement of the liquidation, around 9,000 Thomas Cook employees have been made redundant. Following the collapse of Thomas Cook, the Secretary of State for Transport instructed the Civil Aviation Authority (CAA) to repatriate all estimated 150,000 Thomas Cook customers abroad. Between 23 September and 7 October 2019, the CAA, working with the government, repatriated customers from 54 locations.

Besides its role in repatriation, the government also had to respond to other impacts resulting from Thomas Cook's insolvency. These impacts included making redundancy and related payments to former Thomas Cook employees and covering the costs of the Official Receiver. In addition, in November 2019 the government announced that it would set up a scheme for Thomas Cook customers with outstanding personal injury claims.

Content and scope of the report

In response to media and Parliamentary interest about the role of the government and the costs to the taxpayer following Thomas Cook's collapse, we undertook an investigation into the government's overall response to the collapse. This report covers:

- the actual and potential cost to the taxpayer arising from the repatriation of Thomas Cook customers and the insolvency of Thomas Cook;

- how the government and the CAA planned and carried out the repatriation; and

- how prepared the government was before the collapse of Thomas Cook.

The investigation does not cover the government's response to another UK airline, Flybe, which entered into administration on 5 March, or wider challenges facing the airline industry.

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(C) 2020 M2 COMMUNICATIONS, source M2 PressWIRE

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