Union leader calls for British assets of Thomas Cook to be taken into public ownership

Union leaders are calling for the Government to intervene in the Thomas Cook crisis after the German airline subsidiary of the travel giant was given finance to help secure a rescue deal.

Union leaders are calling for Government action over the collapse of Thomas Cook. Picture: JPI Media
Union leaders are calling for Government action over the collapse of Thomas Cook. Picture: JPI Media

Condor is being given six months financing by the German Government, worth a reported £350 million, to continue to operate.

Thousands of UK workers have lost their jobs and face a battle to receive any redundancy pay after Thomas Cook went out of business on Monday.

Brian Strutton, general secretary of the British Airline Pilots Association (Balpa) said: "Good luck to the Condor staff and customers, but with UK holidaymakers stranded and 9,000 staff out of a job, the Thomas Cook directors need to explain why the UK airline had to be closed but the German one was allowed to continue to operate.

"How was it funded, because it seems there is nothing left in the coffers for UK staff?

"And why couldn't the UK government give the same kind of bridging support as the German government when it was well known that Thomas Cook had a Chinese buyer lined up? It's a national scandal."

Manuel Cortes, general secretary of the Transport Salaried Staffs' Association said: "Unlike our PM, the German government doesn't for one second think that using public money to save jobs is a moral hazard.

"(Boris) Johnson should get rid of his undergraduate economic dogma and live, like the German government, in the real world.

"The problem isn't one of a moral hazard, it's the immorality of his Government which won"t even lift its little finger to save 9,000 jobs.

"The British assets of Thomas Cook must be taken into public ownership and just as the Germans have done, the company can rise back from its ashes.

"If government intervention is good for the Germans, it should also be good for us too."

Richard Moriarty, chief executive of the UK Civil Aviation Authority, said 95% of people were being flown home on the original date of departure at the end of their holiday.

"We have now operated over 130 flights in the first two days of this operation, returning almost 30,000 people to the UK.

"I would like those remaining on holiday to enjoy the rest of their stay because we aim to also fly you home on the day when you were originally booked to fly with Thomas Cook, or very shortly thereafter.

"This remains a highly complex operation and I would like to thank holidaymakers for their patience as some inconvenience and disruption is likely.

"I'd also like to stress my thanks to the UK airline industry and our partners which have lent us incredible support for what is the UK's largest ever peacetime repatriation."

In a debate in the House of Commons about the collapse ofThomas Cook, the Transport Secretary Grant Shapps stressed that Condor "was operating under a somewhat different business model".

He added: "In Germany, people do not book holidays in quite the same way as they do in the UK, partly because UK citizens tend to use the internet in a different way and are much more becoming their own travel agents. With Condor, the business remained profitable.

"It is also the case..that German insolvency rules allow for administrations to take place, and then for aircraft to carry on being used and for other buyers to come in during the administration process. That is not something that our current rules on airline liquidation and insolvency allow for."

Mr Shapps added: "The House must know that no Government would want to lose an iconic, 178-year-old famous British name. I hear people ask, “Why don’t you just put the money in?” All those people have to do is open the books to realise that there is a £1.7 billion debt, with £1.5 billion lost in six months alone, and that another profit warning had been issued.

"I am afraid that this situation is entirely different from that with Condor, which is a fundamentally profitable airline, and it just would not be responsible to throw good money after bad. We would probably be back here in a very short time to offer a bail-out to get people home, rather than to bail out the company. This company just was not a going concern with which we could do that."