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".

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.

Recommended

Share tips of the week
Share tips

Share tips of the week

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
30 Apr 2021
The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework
Investment strategy

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework

John Stepek talks to Steve Clapham, investor, analyst and author of The Smart Money Method, about the dangers in picking individual stocks and why you…
8 Apr 2021
BP looks set to return more money to shareholders as it beats expectations
Energy stocks

BP looks set to return more money to shareholders as it beats expectations

Oil major BP is to embark on a share buyback programme after significantly reducing its debts. Saloni Sardana looks at what it means for your portfoli…
6 Apr 2021
Deliveroo has hit the market – but it’s not getting the warmest welcome
UK stockmarkets

Deliveroo has hit the market – but it’s not getting the warmest welcome

Food delivery company Deliveroo made its debut on the stockmarket this morning. But with the share price sliding by 30% straight away, it’s not made t…
31 Mar 2021

Most Popular

Big Tech on steroids: why the 2020s will be the “decade of the DAO”
Bitcoin & crypto

Big Tech on steroids: why the 2020s will be the “decade of the DAO”

Big tech companies have transformed the way we live our lives. But if you thought they were disruptive, you haven’t seen anything yet. As Dominic Fris…
6 May 2021
Could you end up paying inheritance tax on your family home?
Inheritance tax

Could you end up paying inheritance tax on your family home?

The value of the average UK home has risen by 53% since April 2009, but the inheritance tax threshold has remained static. And that means more people …
7 May 2021
Cryptocurrency ether has hit an all-time high. Why? And will the bull market last?
Bitcoin & crypto

Cryptocurrency ether has hit an all-time high. Why? And will the bull market last?

Cryptocurrency ether – the world’s largest cryptocurrency by market cap after bitcoin – hit an all-time high this week. Saloni Sardana looks at what’s…
5 May 2021