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Thomas Cook collapse: passengers return home as ‘fat cat’ pay row rages -…

by Ace Damon
Passengers await help at Palma airport on Monday

Passengers await help at Palma airport on Monday Photo: Cati Cladera / EPA

Good morning, and welcome to our continued coverage of the world economy, financial markets, the eurozone and business.

The Thomas Cook administration is facing serious wage issues today after the world's oldest tour operator collapsed – triggering Britain's largest peacetime repatriation.

When the first planes brought thousands of tourists back to the UK, with heavy delays at some airports, accusations of “fat cat” incompetence rained down on the company.

Boris Johnson led the criticism, wondering why business leaders pay themselves "large sums of money" as their business goes "down the pipe."

Speaking in New York at the UN climate summit, the PM said:

“I find it a little disconcerting that you have 160,000 people arrested.

"It is not possible for me to know exactly what happened to the directors of the Thomas Cook board and how it came about when they paid themselves x, y or z.

"But we have to have a system in the future, in which we ensure that tour operators are somehow prevented from simply lying on their backs and then requiring the taxpayer to bring everyone home."

British passengers await news of canceled Thomas Cook flights at Palma de Mallorca airport yesterday

British passengers await news of canceled Thomas Cook flights at Palma de Mallorca airport yesterday Photo: Francisco Ubilla / AP

Estimates vary, but we estimate that the three executives who led Thomas Cook over the past 12 years have earned about £ 35 million from them.

Manny Fontenla-Novoa, who led the wave of takeovers that burdened the company with more than £ 1 billion in debt, received over £ 17 million in just over four years as head of Thomas Cook, boosted by cut-off bonuses. 2,800 jobs after merging with MyTravel. He left in 2011, when the tour operator almost collapsed.

His successor was Harriet Green, who received £ 4.7 million for less than three years, plus a stock bonus of over £ 5.6 million. She handed a third of this award to charities after the deaths of two children from carbon monoxide poisoning at Thomas Cook in Corfu.

Green also claimed £ 80,000 a year to cover his hotel bills at Brown's five-star hotel in London, where he lived during the week.

Peter Fankhauser, who was in charge when the company collapsed, received £ 8.3 million, including £ 4.3 million in bonuses.

The government has already ordered an investigation into the company's collapse, so the Insolvency Service will examine why Thomas Cook collapsed into a mountain of debt and whether the directors are to blame.

Johnson and colleagues are also facing criticism after refusing to help Thomas Cook by handing him a £ 200 million lifeline. Some argue that this would not have solved the company's problems, but it appears to have undermined rescue efforts led by Spain and Turkey.

Meanwhile, the Civil Aviation Authority team will continue to mobilize planes to take Thomas Cook's customers home – with about 150,000 overseas tourists yesterday, when the company sank.

Everyone has been promised to be taken home, but it can be a complicated process – with many delays and confusion reported yesterday.

British passengers line up at a check-in service at Dalaman Airport in Turkey last night.

British passengers line up at a check-in service at Dalaman Airport in Turkey last night. Photo: Ümit Bektaş / Reuters

Also arriving today

As Thomas Cook's clients go home, City merchants will be watching the supreme court, which will decide whether Boris Johnson tricked the queen into suspending parliament.

New US and German confidence data may also be interesting as concerns about the economic slowdown fall after weak industrial production figures on Monday.

The agenda

  • 9 am BST: IFO Survey on German Business Confidence
  • 9:30 am: BST: UK Public Finance for August
  • 3 pm BST: US Consumer Confidence in August

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