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Former Thomas Cook boss defends record, pay after firm's collapse

Thomas Cook, the world's oldest travel firm, collapsed last month, stranding over a hundred thousand passengers. Archive photo | REUTERS

| London |

The former chief executive of bankrupt travel firm Thomas Cook said today he understood public anger over his pay but defended his record, saying he had worked tirelessly to try to save the company.

Thomas Cook, the world's oldest travel firm, collapsed last month, stranding over a hundred thousand passengers.

Appearing before a British parliamentary committee, Peter Fankhauser apologised again to customers, staff and suppliers, but did not say if he would hand back any of his pay.
Asked about his salary, which totalled 1.02 million pounds ($1.29 million) in 2018 including pension and benefits, Fankhauser said he did not set his own pay or decide any bonus.
"I fully understand the sentiment in the public," he told the committee. "However, what I can say to that is that I worked tirelessly for the success of this company and I'm deeply sorry that I was not able to secure the (rescue) deal."

He said that a 750,000 pound bonus he was paid in 2017 could theoretically be clawed back, but 30% was paid in shares which were now worthless.

Fankhauser said his efforts to transform the company on his appointment in 2014 had been constrained by its debts, and that responsibility for the collapse was shared between multiple parties who tried, and failed, to agree a restructuring plan.

The firm collapsed after it became unable to service its debts and failed to convince banks to back a rescue plan in the face of changing customer habits and intense competition from low-cost airlines and internet companies.

Thomas Cook's management said a deal was possible until the final hours before the company failed, and that banks and shareholder Fosun would have backed a deal to save the company if there had been government support.

Thomas Cook's German airline Condor is still operating with support of a loan from the German government, while its Nordic business may still be bought. Its UK business went straight into liquidation, with its UK shops bought by a rival last week.

Fankhauser said he would not criticise the UK government for its decision not to provide support but that the cost of Thomas Cook's collapse was "far higher" than what the firm requested.

He said government help would have secured the restructuring plan and done more for the business than just stave off an inevitable collapse, which is what ministers have said.
"The recapitalisation plan, once successfully completed, would have put us in the position that we most probably would have been the best funded travel company in Europe," he said.

"I firmly believe that after the successful recapitalisation, we would have had a new start. Otherwise I would have not fought so hard for it."

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