To not understand the fixation about Thomas Cook being bailed out

[EL8888]

I am confused by the petitions and fixation about bailing Thomas Cook out. Let’s have a reality check. Money is tight anyway and Brexit isn’t helping. This is going to be a tough winter especially in the NHS and probably quite a few extra people will die. Why spend £200m on essentially what is a random company. Yeah people will be made redundant but it’s just one of those things. I’ve been made redundant and it’s not pleasant but there are other jobs out there

Problem is if they bail out one private company, they set the precedent for bailing out all the others.

Further, it would be likely they are just delaying the inevitable as who would book with TC after the bail out? Their sales would plummet so they would either go bust later or constantly need cash injections, costing the taxpayer more.

It’s an awful situation and I feel sorry for the staff and British business. But it’s not up to the government.

@MoonageDaydreamz After this though I think that the government should introduce regulations where every flight bought has to have repatriation insurance added to it. … We shouldn't ever be bearing the cost of doing this again.

You have just described the ATOL fund, which is administered by the CAA and funded by the airlines and the passengers themselves (£2.50 per ticket) in order to provide an emergency fund for exactly this type of event and to avoid the government being landed with the bill. It has been in existence since 1973.

The CAA holds £170m in funds and has a £400m insurance policy in place to deal with this.

'We' (i.e. the government/taxpayers/us) have not paid for the repatriation flights

Bet Thomas Cook wish they were based in Scotland. The SNP has wasted £135 million of taxpayers money trying to prop up failed businesses from Prestwick airport to Clyde blowers.
If a business fails for anything other than simple temporary cash flow reasons, then it’s probably not viable. And there’s no point throwing good money after bad in a vain attempt to resuscitate a corpse.

I can absolutely see why the Government did not bail them out, but I can also see the massive immediate job losses and the knock-on effects it will have.

Why does the government (tax payer) have to foot the bill for repatriation people? Repatriate them by all means but then bill them for the cost, installment plans if required. There's no incentive for people to be properly insured if they know someone else will suck up the costs if you're not. And how many airlines need to go out of business before it is recognised that this can happen?

@BarbariansMum Why does the government (tax payer) have to foot the bill for repatriation people?

The government/taxpayers/us have not paid for the repatriation flights - the repatriation operation has been paid for by the ATOL Fund.

The money in the fund (£570m including insurances) comes from a £2.50 levy on each ticket - paid by the travellers themselves, meaning that they are paying into a form of insurance fund.

It’s awful that a lot of people have lost their jobs because of this.
However, TC was a business - a business that knew it was failing but left it too late to secure liquidity even though the writing was on the wall a while back - and unless we are going to start living under a quasi Corbyn regime already, we can’t be bailing out or ‘re-nationalising’ private companies (for this is what it would be in light of the RBS debacle). I think I’m right in saying that the parent company isn’t British anyway (someone correct me if I’m wrong) which would therefore complicate matters further.

I didn’t like her (or her politics) but Margaret Thatcher was right about the miners. There’s no point propping up things that can’t survive and wasting money
Except she was happy to nationalise a bank that failed (Johnson Matthey 1984) - admittedly it only cost us £1 to buy but she was a weapons-grade hypocrite.

And Thatcher's destruction of the coal industry was political, never economic.

Ironically Thomas Cook was in public ownership between 1948 and 1972

The German government has provided 380 million Euros to keep Condor - the Thomas Cook subsidiary airline going.

I think I’m right in saying that the parent company isn’t British anyway (someone correct me if I’m wrong)
You're wrong - although in fairness their largest shareholder was a Chinese company.

Many more holiday companies will be going bust if the climate alarmists get their way!

familycourthq I thought their main shareholder was the German company they merged with? Still its shareholder split makes it a multinational of sorts which I would imagine makes it less straightforward to bailout.

Still its shareholder split makes it a multinational of sorts which I would imagine makes it less straightforward to bailout.
Yet as usual governments on Mainland Europe seem to be able to help the arms of the company in their areas

It's not just a one off £200m. The business as a whole was a loss making financial basket case with huge debts. £200m to keep it limping along, but for how long? Another £200m needed at Christmas, then another £200m at Easter. Ultimately, it's collapse was inevitable and it would have needed a hell of a lot of restructuring to save it, which would have involved closing down the High St travel agent chain anyway (as all other big travel firms had already done!).

People still go on holiday. The hotels will still get filled. The planes will be leased to other operators. Many of the staff will get jobs in other travel firms who will grow on the back of TC's demise.

It needed to go under. Its an outdated business model. Everybody has internet, and no one really needs a middleman with a printer to buy travel tickets.

glad to hear its not the "tax payer" who is paying to get people home.
I really don't see why a holiday company should be bailed out.

It's outrageous that they should be bailed out at all when there is such clear evidence of mismanagement and generally appalling business practice. Bosses of companies like this just seem to walk away with no consequences, after years of high salaries, giant self-awarded bonuses etc, no doubt huge pension as well, with no thought to the many ordinary working folks who lose their jobs. I'd jail the bastards and take their money.

Bosses of companies like this just seem to walk away with no consequences, after years of high salaries, giant self-awarded bonuses etc, no doubt huge pension as well, with no thought to the many ordinary working folks who lose their jobs. I'd jail the bastards and take their money.
I agree - although I feel this might be a tad tricky to actually enforce :)

They should have done what the German government did for the Condor branch ff Thomas Cook. A bailout. Holidays booked are honoured but no new bookings. Wind up the company, give employees proper redundancy help and time to find work.

I for one would like to see a thorough investigation into the mismanagement and clearly dodgy accounting and as to how these fat cats were still allowed to cream their bonuses when the company was in such trouble.

It effects me and my family directly and hundreds of colleagues. So I'm hoping they get their collars felt.

Probably won't though.

Money was taken the night before the collapse, 60 million rumoured to prop up our German sister company who were bailed out.

Our scum bag of a boss who incidentally venomously disliked the UK airline employees, is seen arriving at their head office to a hero's welcome....

The very next day.

As pp have noted, the 200 million would have been a temporary stop gap and very likely just would have delayed the exact same scenario happening at a point in time in the future, requiring the government to pay for the repatriation of holidaymakers at that time. So it's not really 200 versus 600 million that the government would be paying, it would be 200 + 600 million (or whatever the cost would be to repatriate people) ultimately.

I'm still furious that as recently as last October RBS stated that they will never pay back the 46 billion taxpayer bailout they received. I think the government should make it clear that they should pay it all back if it takes 200 years to do it! The British government itself made the last repayments to the USA & Canadian governments for money lent to hep in WWII in 2006 - it took 50 years to pay back that money but they did it. Why the fuck RBS thinks they can blow off repaying any of the taxpayer billions only a decade after their actions helped cause the great recession makes my blood boil.