Thomas Cook loses its 'moral compass'
Tour operator Thomas Cook triggered outrage with its response to the deaths of two children on one of its holidays in 2006.
Tour operator Thomas Cook triggered outrage this week with its response to the deaths of two children on one of its holidays in 2006. Bobby and Christi Shepherd, aged 6 and 7, died of carbon monoxide poisoning in Corfu. The cause was a faulty boiler in their hotel room. Thomas Cook did not own the hotel, but an inquest that ended this week found that the group had not done enough to ensure the property had carried out proper safety checks.
During the inquest, chief executive Peter Fankhauser said he sympathised, but that Cook had "no need to apologise" as it hadn't done anything wrong. It also emerged that the company had received £3.5m in compensation from the hotel owner, around ten times the sum the family had received.
After paying its lawyers, Cook has now donated the remaining £1.5m to Unicef. Amid the outcry, Fankhauser said he was "deeply sorry" and admitted the company "could have handled its relationship with the family better".
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What the commentators said
During the trial and inquest, the company "presented itself as the very model of the legalistic corporation", said economist.com's Gulliver blog. The family pleaded for a "smidgen of contrition", but the firm kept rejecting any responsibility. It must have been "encouraged in its intransigence by legal advice that a real apology might amount to an admission of culpability".
Still, said Alistair Osborne in The Times, you'd think Cook's lawyer "might have found a form of words that got around that, or that Cook's directors might have insisted it did". An apology that comes after a public outcry "looks grudging". The Unicef payment was also "cack-handed", added The Guardian's Nils Pratley.
Fankhauser said it was the right thing to do, failing to explain why it wasn't right when the cash was received in 2013 and 2014. It's not yet clear what "[mislaying] its moral compass" could cost Cook, said the FT. But it's interesting to note that monthly Google searches for the company have dropped by 18% year-on-year.
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Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.
After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.
His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.
Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.
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