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The article abdicates the responsibility of Thomas cook itself. It's clearly not solely an issue of external factors (althemoreso those factors were predictable

The article abdicates the responsibility of Thomas cook itself. It's clearly not solely an issue of external factors (althemoreso those factors were predictable). TC has financial troubles for a decade now. It known to be in a dire situation the past few years. And yet it was allowed to sell unrealizable packages to hundreds of thousands of people. Now their collapse costs a fortune to the UK taxpayers and probably even more to the thousands of businesses in the european south that are damaged. It's a little rich to pretend it was all inevitable

ineedasername 7y ago
Yes, it's costing the UK not much less than if they had bailed out the company and forced some restructuring. (Yes, that way lies the potential for moral hazard)
- buboard 7y ago
  the costs for other countries are higher. For greece alone the cost is estimated at 200M
  - Symbiote 7y ago
    Where does this cost Greece money?
    - buboard 7y ago
      they didnt leave just the tourists stranded, they left hotels, car rentals etc. unpaid since july.
      - tonyedgecombe 7y ago
        I expect they have been paying on 90 days for a long time.
    - giobox 7y ago
      TC pays the hotels and its contractors in arrears. TC ships a huge number of Brits to Greece every year. There are reports of hotels demanding payment from the travellers themselves given TC won't now be paying etc. They also employed directly/indirectly a great many people around Europe.
      - jayflux 7y ago
        The C.A.A are covering all costs to hotels. Mainly through the ATOL fund. The CAA have already reached out to those hotels who have been kicking people out. So no, it’simply not true that any Greek hotel will be left out of pocket from this.
        usr1106 7y ago
        It's not so easy. Reportedly TC has not being paying (some?) hotel bills since June. Even if a fund (Britain), insurances (Germany) and whoever might be responsible in various countries pays the outstanding bills, how will their hotel business continue? If there were 600,000 TC tourists out in the beginning of this week, there is capacity for 600,000 tourists in 3 weeks, in 6 weeks and so on. Winter might always be a bit less busy, but it's obvious that economies in the holiday countries will lose a lot for many months to come. Much more than Britain or any of those companies where the tourists come from.
        ineedasername 7y ago
        Yes. Let's calculate on the conservative side and say they would have spent about an average of $800 on hotel, food, local attractions, souvenirs, etc. That's about half a billion to the local economies. Not all of that is a loss for the 600,000 out right now, and some future vacationers might re-book, but plenty of them won't have the money to pay again or decide not to spend it, and simply wait until next year for their next vacation. I wouldn't be surprised if the losses went to a full billion or so. I'm not sure what the long term costs of "moral hazard" would be, but I've also never bought it as the bogey man some make it out to be. I simply don't think that many executives would steer their company in a direction that is more likely to lead to insolvency just because it might get bailed out. Not when it also means they lose their job in disgrace along with a lot less in compensation than they would have made if the company stayed solvent.
- devnulloverflow 7y ago
  > (Yes, that way lies the potential for moral hazard) Which is to say that it is in fact costing the UK very much less than a bailout.
  - ineedasername 7y ago
    Yes, in the long run it might cost more than the nominal sticker price of bailing them out. But losing their contribution to the economy may also cost more in the long run. I don't know which is greater, but it seems reasonable that it might be as good to have a policy of intervention. Somewhat like what is done with banks & the FDIC providing both assistance in securing customer money and at the same time a very orderly unwinding of the business, often restructuring & take over by another party. That might be better than letting it crash into insolvency at full speed. But honestly I don't know: I don't think there's an easy calculation here, and probably it's best for a country to take these things on a case by case basis. I think it's reasonable to not bail out TC, but I also think the alternative could have a rational basis as well.
jayflux 7y ago
> Now their collapse costs a fortune to the UK taxpayers. Does it? Grant shapes (secretary of state for transport) said most of the money to sort this mess has come from the ATOL fund rather than tax. And if that doesn’t cover it then the money from asset stripping TC will be used to pay back customers. So I’d be interested to know you've got that from.
- buboard 7y ago
  That fund is apparently not enough to cover the associated costs https://www.thetimes.co.uk/article/taxpayer-faces-huge-bill-as-thomas-cook-collapse-expected-to-cost-1bn-vrlcqkkzb https://www.thetimes.co.uk/article/taxpayer-faces-huge-bill-...
  - gambiting 7y ago
    "This is in addition to an expected £100 million bill to return Thomas Cook passengers to Britain" - it might be true, but I just don't understand where they are getting that number from. When Monarch Airlines collapsed, repatriating 110k passangers cost £16.3M - but somehow repatriating 150k tourists is going to cost over £100M here??
    - Scoundreller 7y ago
      Reasons why this might be a lot more expensive: 1. Monarch just flew EU. TC also does Cuba; Mauritius; Barbados, USA, India 2. Because of the 737MAX mess, there’s fewer available seats on other airlines and there just aren’t idle charter planes available.
      - gambiting 7y ago
        In response to #2: Thomas Cook had its own airline with its own fleet of aircraft. Surely some of the fund could be used to keep that fleet and its pilots employed and operational to bring the people back? No need to charter anything then.

ineedasername 7y ago

Yes, it's costing the UK not much less than if they had bailed out the company and forced some restructuring. (Yes, that way lies the potential for moral hazard)

buboard 7y ago
the costs for other countries are higher. For greece alone the cost is estimated at 200M
- Symbiote 7y ago
  Where does this cost Greece money?
  - buboard 7y ago
    they didnt leave just the tourists stranded, they left hotels, car rentals etc. unpaid since july.
    - tonyedgecombe 7y ago
      I expect they have been paying on 90 days for a long time.
  - giobox 7y ago
    TC pays the hotels and its contractors in arrears. TC ships a huge number of Brits to Greece every year. There are reports of hotels demanding payment from the travellers themselves given TC won't now be paying etc. They also employed directly/indirectly a great many people around Europe.
    - jayflux 7y ago
      The C.A.A are covering all costs to hotels. Mainly through the ATOL fund. The CAA have already reached out to those hotels who have been kicking people out. So no, it’simply not true that any Greek hotel will be left out of pocket from this.
      - usr1106 7y ago
        It's not so easy. Reportedly TC has not being paying (some?) hotel bills since June. Even if a fund (Britain), insurances (Germany) and whoever might be responsible in various countries pays the outstanding bills, how will their hotel business continue? If there were 600,000 TC tourists out in the beginning of this week, there is capacity for 600,000 tourists in 3 weeks, in 6 weeks and so on. Winter might always be a bit less busy, but it's obvious that economies in the holiday countries will lose a lot for many months to come. Much more than Britain or any of those companies where the tourists come from.
        ineedasername 7y ago
        Yes. Let's calculate on the conservative side and say they would have spent about an average of $800 on hotel, food, local attractions, souvenirs, etc. That's about half a billion to the local economies. Not all of that is a loss for the 600,000 out right now, and some future vacationers might re-book, but plenty of them won't have the money to pay again or decide not to spend it, and simply wait until next year for their next vacation. I wouldn't be surprised if the losses went to a full billion or so. I'm not sure what the long term costs of "moral hazard" would be, but I've also never bought it as the bogey man some make it out to be. I simply don't think that many executives would steer their company in a direction that is more likely to lead to insolvency just because it might get bailed out. Not when it also means they lose their job in disgrace along with a lot less in compensation than they would have made if the company stayed solvent.
devnulloverflow 7y ago
> (Yes, that way lies the potential for moral hazard) Which is to say that it is in fact costing the UK very much less than a bailout.
- ineedasername 7y ago
  Yes, in the long run it might cost more than the nominal sticker price of bailing them out. But losing their contribution to the economy may also cost more in the long run. I don't know which is greater, but it seems reasonable that it might be as good to have a policy of intervention. Somewhat like what is done with banks & the FDIC providing both assistance in securing customer money and at the same time a very orderly unwinding of the business, often restructuring & take over by another party. That might be better than letting it crash into insolvency at full speed. But honestly I don't know: I don't think there's an easy calculation here, and probably it's best for a country to take these things on a case by case basis. I think it's reasonable to not bail out TC, but I also think the alternative could have a rational basis as well.

jayflux 7y ago

> Now their collapse costs a fortune to the UK taxpayers. Does it? Grant shapes (secretary of state for transport) said most of the money to sort this mess has come from the ATOL fund rather than tax. And if that doesn’t cover it then the money from asset stripping TC will be used to pay back customers. So I’d be interested to know you've got that from.

buboard 7y ago
That fund is apparently not enough to cover the associated costs https://www.thetimes.co.uk/article/taxpayer-faces-huge-bill-as-thomas-cook-collapse-expected-to-cost-1bn-vrlcqkkzb https://www.thetimes.co.uk/article/taxpayer-faces-huge-bill-...
- gambiting 7y ago
  "This is in addition to an expected £100 million bill to return Thomas Cook passengers to Britain" - it might be true, but I just don't understand where they are getting that number from. When Monarch Airlines collapsed, repatriating 110k passangers cost £16.3M - but somehow repatriating 150k tourists is going to cost over £100M here??
  - Scoundreller 7y ago
    Reasons why this might be a lot more expensive: 1. Monarch just flew EU. TC also does Cuba; Mauritius; Barbados, USA, India 2. Because of the 737MAX mess, there’s fewer available seats on other airlines and there just aren’t idle charter planes available.
    - gambiting 7y ago
      In response to #2: Thomas Cook had its own airline with its own fleet of aircraft. Surely some of the fund could be used to keep that fleet and its pilots employed and operational to bring the people back? No need to charter anything then.