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As Britain Lets Thomas Cook Fail, Germany Rescues Subsidiary

As Britain Lets Thomas Cook Fail, Germany Rescues Subsidiary
Jeff Edwards

Although U.K. officials rejected a plea for a cash infusion to keep Thomas Cook planes in the sky, the German government approved an emergency effort to keep the airline’s Frankfurt-based subsidiary Condor flying. Paradoxically, spending millions of dollars to keep the leisure carrier afloat may have just been the more frugal decision.

On Sunday, just days after British government officials rejected a plan to rescue Thomas Cook, the tour operator and airline abruptly ceased operations, stranding thousands of passengers and employees. Meanwhile, the German government stepped in with emergency funding to keep the company’s Frankfurt Airport (FRA)-based subsidiary Condor Airlines afloat.

Not surprisingly, the stark differences in approach were noted by stranded passengers and newly-unemployed airline workers. While Condor Airlines’ future is far from assured, passengers with tickets on the German subsidiary were not left scrambling to find a way home nor were they subject to paying walk-up fares sometimes thousands of dollars more expensive than the original cost of their tickets.

“Good luck to the Condor staff and customers, but with UK holiday-makers 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,” BALPA General Secretary Brian Strutton said in a strongly worded statement on Wednesday. “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.”

U.K. politicians have insisted that rescuing a private company from its own mistakes is not an appropriate use of tax money. In opposing plans to offer a lifeline to Thomas Cook, Transportation Secretary Grant Shapps told lawmakers that a taxpayer-funded cash infusion would have offered “no guarantee” that the carrier would survive.

It appears, however, that the price of allowing Thomas Cook to fail might be even more costly than paying to keep the airline afloat. Immediately after Thomas Cook announced that it had “ceased trading,” the U.K. Civil Aviation Authority (CAA) announced plans for “Operation Matterhorn.” The effort is billed as “the largest reparation of British citizens since the end of World War II.” The massive undertaking is expected to cost well over $100 million.

“Despite the challenges of this unprecedented situation, I am pleased that our Operation Matterhorn is on track with around 61,000 people flown home in the first four days – over 40 percent of the total,” CAA chief Richard Moriarty confirmed on Friday. “Around 95 percent of people have flown home on their original date of departure at the end of their holiday. An operation of this scale and complexity will inevitably cause some inconvenience and disruption and I am very grateful to holidaymakers for bearing with us as we work around the clock to bring them home.”

Operation Matterhorn is scheduled to continue until October 6th and is expected to involve more than 1,000 flights when all is said and done. The costly effort appears to be going smoothly, but perhaps not as smoothly as if Thomas Cook could have been saved from collapse in the first place.

Even as some Thomas Cook passengers struggle to find alternative transportation home, Condor passengers have a bit more of a safety cushion when it comes to reevaluating future travel plans – but for how long? The Flyertalk community of expert flyers has the very best advice for passengers with upcoming Condor bookings on when to hold ‘em, when to fold ‘em, when to walk away and when to run.

View Comments (3)

3 Comments

  1. EqualOpp

    September 28, 2019 at 10:49 am

    so Thomas Cook failed…it’s just “capitalism” isn’t it? SO WHAT…

    why all the tears?

    renounce capitalism as a failed system then I’ll pay (more) attention.

  2. Flight44

    September 29, 2019 at 8:03 am

    In other words, taxpayers fund the holiday ? Is that what you’re saying?

    They bought tickets on a dodgy company’s flights. Take your medicine.

  3. UncleDude

    September 29, 2019 at 10:40 am

    No UK Thomas Passenger has been left Stranded..Yes their Return may have been delayed but by 2nd of October all UK Passengers will have been repatriated

    As for Government support look at The History of PanAm..Sabena.SwissAir..Malev…Mexicana all had some form of Initial Government Support but eventually collapsed.

    Most of The World does not have the unusually benefit of Chapter 11.. Indeed most of the World does not allow an Individual with 5 Multi-Million Company Failures to Continue as a Director..Never Mind become President of The Country.

    PS Anybody want to buy my 2001 Purchased Delta Shares

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