Thomas Cook files for US bankruptcy protection

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This topic contains 82 replies, has 18 voices, and was last updated by  FaroFlyer 12 Oct 2019
at 18:39
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Viewing 10 posts - 76 through 85 (of 85 total)

  • rferguson
    Participant

    SimonS1 I agree with a lot of what you say. BA has had far too many ‘misunderstandings’ and that can often be due to the size of the operation and the fact that internal communication is obviously not as good as it could or should be. I do disagree with this line though, especially in the context of getting the TCX crew home to the UK. “I therefore suggest to you that BA’s initial treatment of Thomas Cook crew (and yes this is a Thomas Crew thread, so entirely relevant) was in fact down to the usual penny pinching and only changed when the media appeared on the scene.” I guess penny pinching could be an issue if you factor in contracting a swathe of ground operations (although BA is far from unique in this respect). But where you say BA’s stance only changed when the media came on the scene. That’s not correct. It was more a case of the media jumped on the fact that initially when some TCX crew approached the ticket counter who had no idea what Thomas Cook even was, less that they were an airline that had just gone bankrupt, quoted them the Joe Public fare that the computer spat out. Absolutely, this should not have happened. Communication obviously wasn’t effective and I believe this was very soon after TCX was declared bust. I am often critical of a lot of BA’s decisions on here (or as is often the case in-decisions) but I do believe that BA had every intention of bringing any stranded passengers, crew and other staff home to the UK that they could accommodate.

    2 users thanked author for this post.

    SimonS1
    Participant

    I am giving examples of why BA seem to be serial ‘misunderstanders’ or instead how their response to Thomas Cook crew was in fact part of a clear pattern of behaviour. Another ‘unfortunate misunderstanding’ being when BA’s own cancellation of flights on the wrong date and then reinstatement. I therefore suggest to you that BA’s initial treatment of Thomas Cook crew (and yes this is a Thomas Crew thread, so entirely relevant) was in fact down to the usual penny pinching and only changed when the media appeared on the scene.

    I think mkcol74’s point might be that it just seems like BA bashing for the sake of it as opposed to any justified reason. BA, unlike Virgin, has helped a far larger number of stranded Thomas Cook crew, and isnt blasting it in the media. Branson being a Media queen will use every opportunity to inflate his ego and the image of his airline. The misunderstanding I believe is an honest one as it was at LAS where BA has mainly outsourced ground staff who probably didnt really know, and hence made the error. In the end, the crew were brought home. The strike confusion emails (one of which I also received) was annoying, but again, when I compare BA’s handling of the industrial action by their extremely well paid pilots, versus the ritualistic and continual strikes that Air France has, I think BA handled it very well. Furthert, BA isnt the only large travel company that has been hacked, numersous companies have. Yes, I agreee, should’nt happen, but again it just seems any chance to bash BA is jumped on. BA is certainly not perfect, but give me one example of an airline the size of BA that is perfect, you wont find one.

    And my point is that I don’t agree. I am giving factual evidence of various things, which to me suggest costs at BA have been cut too far. This includes:

    1. Two major IT problems (and another systems outage yesterday)
    2. Strike action (when BA rushed to cancel flights rather than negotiate, and made a total hash of it)
    3. Major loss of client data when systems were hacked (which other airline has experienced a hack on such a scale)
    4. Bad publicity re TC repatriations
    5. Issues at Level leading to replacement of CEO
    6. Not proactively offering EC261 payments and receiving so many complaints that customers are waiting 2 months and more for a response

    The common model here being a) blame someone else (supplier, other party etc) and b) putting costs before the paying customer.

    This is not BA bashing, it is just stating facts that culminated in a profit warning to the stock exchange only 2 weeks ago.

    You might have thought that in the circumstances BA might have welcomed some good PR, however it did seem almost inevitable that the first mention of them in context of TC was a bad one. And remember the model: blame someone else – tick (you have blamed outsourced staff) and put costs first (try to charge £10,000 per seat). Hey ho.


    rferguson
    Participant

    I am giving examples of why BA seem to be serial ‘misunderstanders’ or instead how their response to Thomas Cook crew was in fact part of a clear pattern of behaviour. Another ‘unfortunate misunderstanding’ being when BA’s own cancellation of flights on the wrong date and then reinstatement. I therefore suggest to you that BA’s initial treatment of Thomas Cook crew (and yes this is a Thomas Crew thread, so entirely relevant) was in fact down to the usual penny pinching and only changed when the media appeared on the scene.

    I think mkcol74’s point might be that it just seems like BA bashing for the sake of it as opposed to any justified reason. BA, unlike Virgin, has helped a far larger number of stranded Thomas Cook crew, and isnt blasting it in the media. Branson being a Media queen will use every opportunity to inflate his ego and the image of his airline. The misunderstanding I believe is an honest one as it was at LAS where BA has mainly outsourced ground staff who probably didnt really know, and hence made the error. In the end, the crew were brought home. The strike confusion emails (one of which I also received) was annoying, but again, when I compare BA’s handling of the industrial action by their extremely well paid pilots, versus the ritualistic and continual strikes that Air France has, I think BA handled it very well. Furthert, BA isnt the only large travel company that has been hacked, numersous companies have. Yes, I agreee, should’nt happen, but again it just seems any chance to bash BA is jumped on. BA is certainly not perfect, but give me one example of an airline the size of BA that is perfect, you wont find one.

    And my point is that I don’t agree. I am giving factual evidence of various things, which to me suggest costs at BA have been cut too far. This includes:

    1. Two major IT problems (and another systems outage yesterday)
    2. Strike action (when BA rushed to cancel flights rather than negotiate, and made a total hash of it)
    3. Major loss of client data when systems were hacked (which other airline has experienced a hack on such a scale)
    4. Bad publicity re TC repatriations
    5. Issues at Level leading to replacement of CEO
    6. Not proactively offering EC261 payments and receiving so many complaints that customers are waiting 2 months and more for a response

    The common model here being a) blame someone else (supplier, other party etc) and b) putting costs before the paying customer.

    This is not BA bashing, it is just stating facts that culminated in a profit warning to the stock exchange only 2 weeks ago.

    You might have thought that in the circumstances BA might have welcomed some good PR, however it did seem almost inevitable that the first mention of them in context of TC was a bad one. And remember the model: blame someone else – tick (you have blamed outsourced staff) and put costs first (try to charge £10,000 per seat). Hey ho.

    A lot of what you say Simon is very correct. BA does have a PR problem. I don’t think anyone is denying that. And as you say there is often a lack of accountability and much passing of the buck. But part of the problem is that BA is BA and the media does love a BA story. For example the fact that a third party ticket desk worker in LAS incorrectly quoted a fare (and one hundred percent agree with you this should not have happened) makes huge news. The fact that Jet2 quietly tripled prices on routes they competed with Thomson on the day after they went bust was a little side story with certainly little media or blog attention. I read a lot of blogs and online travel sites and depending on where they are based the biggest names always seem in the firing line. The US blogs love to hate AA and UA. The Aussie ones often take aim at Qantas. And even the Asian ones get vexed when Cathay changes an intra asia route from a hot meal to a sandwich.

    The IT failures were a disaster although it can (and does) happen to other airlines worldwide. Especially seemingly in the US grounding whole operations.

    Air Canada, Cathay Pacific, Hilton Hotels, Hyatt Hotels, Mandarin Oriental Hotels, Marriott have all suffered significant data hacks/breaches.

    But often it’s about how the aftermath of these issues are handled that sticks in peoples minds. The seeming inability from anyone within BA (at the top) to put their hand up QUICKLY and say ‘I take responsibility for this and I will fix it’ is where BA falls down. And for those of us on the front line this seeming lack of accountability or ‘taking charge’ from senior management is frustrating and painful. When a customer complains onboard for an issue and it’s the three-billionth time you’ve heard about this issue (the first time was nearly a year ago). And you’ve fed it back (multiple times) and you know your colleagues have and it’s a trivial thing with a seemingly easy fix yet it gets bogged down ‘in the system’. Let’s use free access to wifi on a wifi enabled aircraft for customers sat in First, or with non functioning IFE for instance.

    The great irony is – and I posted about this in a separate thread – neither the data breach fine nor the IT failure costs were listed as contributory factors in the recent IAG profit warning. Don’t talk about our mistakes!! Instead, it was focused on the BALPA pilots strike action and some other trivial issues. IMHO this ‘profit warning’ was a weapon in the PR war against BALPA. And anyway, even with the ‘lowered forecast’ IAG is on course to make £3.7B over the whole year.

    But on the issue of the TCX crew I can say that (incorrect fare quote aside) i’m proud of what BA has done in getting them home and it’s not often I use the ‘P’ word about BA. 🙂

    **Personal opinions only**

    2 users thanked author for this post.

    SimonS1
    Participant

    Indeed rferguson I agree. I imagine the difference between Jet2 and BA is that Jet2 does not have such an unfortunate track record. But they also got slated in the media.

    The reality I would say is that front line jobs have been dumbed down to such an extent that few people are able to take a decision any more and it is mostly ‘computer says no’ service. In the past an experienced member of staff would be able to use their judgement. These days staff are either outsourced or scared for their job.

    As you rightly say, how you handle these situations is the test of a good company. Do they apologise to the customer, take responsibility, and put it right? Or is the first priority to pass the buck and minimise cost…..not our fault guv, one of our suppliers pulled the plug out, not our problem. In fact even then BA tried to pass the buck to insurers until the Insurance Brokers Association kicked up a fuss and the advice was ‘changed’.

    Anyway, hey ho, it will need a massive cultural change to see any difference.


    rferguson
    Participant

    Indeed rferguson I agree. I imagine the difference between Jet2 and BA is that Jet2 does not have such an unfortunate track record. But they also got slated in the media.

    The reality I would say is that front line jobs have been dumbed down to such an extent that few people are able to take a decision any more and it is mostly ‘computer says no’ service. In the past an experienced member of staff would be able to use their judgement. These days staff are either outsourced or scared for their job.

    As you rightly say, how you handle these situations is the test of a good company. Do they apologise to the customer, take responsibility, and put it right? Or is the first priority to pass the buck and minimise cost…..not our fault guv, one of our suppliers pulled the plug out, not our problem. In fact even then BA tried to pass the buck to insurers until the Insurance Brokers Association kicked up a fuss and the advice was ‘changed’.

    Anyway, hey ho, it will need a massive cultural change to see any difference.

    Your last sentence pretty much sums it up. And many CEO’s have come to BA with that intention yet I think they underestimate the mammoth task ahead of them.

    In terms of the ‘computer says no’ comment. Yes it is becoming more and more like that. Part of that IS literally the computer says no….in a sense that the new systems that have been installed (like ‘fly’ that manages the whole check in/boarding process) is almost near impossible to circumvent. Also, as you say BA used to have many experienced staff at check in/ticketing that had years of practical experience and often had knowledge of little methods to ‘get around’ certain road blocks. Unfortunately, there are few of these left and they have been replaced by young frontline staff trained to a very basic level.

    Saying that, again, as a passenger on other airlines it is an issue i’ve encountered elsewhere and some are far worse than BA. For me the stand out ‘computer says no’ airline is Qatar which is sad given how amazing they are on board.

    At least on board we are able to use judgement and are pretty much given free reign in recovering situations as much as we can. We’re able to move customers from one cabin to another, give them a bottle of champagne or whatever else we want, give someone in Economy that hasn’t ordered a special meal with what we have suitable in First or Club. A lot of airlines do not give their crew such flexibility on board.

    Anyway apologies for hijacking the thread!

    5 users thanked author for this post.

    capetonianm
    Participant

    In terms of the ‘computer says no’ comment. Yes it is becoming more and more like that. Part of that IS literally the computer says no….in a sense that the new systems that have been installed (like ‘fly’ that manages the whole check in/boarding process) is almost near impossible to circumvent. Also, as you say BA used to have many experienced staff at check in/ticketing that had years of practical experience and often had knowledge of little methods to ‘get around’ certain road blocks. Unfortunately, there are few of these left and they have been replaced by young frontline staff trained to a very basic level.

    This is the foundation of the problem. I tend to blame the IT companies for dumbing down the processes to the extent that they are all ‘click and point’ and can theoretically be operated by untrained youngsters with zero knowledge of the industry and procedures. On the other hand the IT companies are probably only being responsive to the requirements of their customers, but it’s a train smash.

    1 user thanked author for this post.

    transtraxman
    Participant

    If the Thomas Cook Scandinavia and Thomas Cook Condor airlines were profitable and continue to fly, questions are raised about the government closing down the airline Thomas Cook UK. The Unite union claims the airline was profitable as previous financial results showed.
    This article looks at the question more…
    “Thomas Cook: Union calls for liquidation of ‘viable’ airline to be halted”, (Travel Weekly 10-10-19)

    http://www.travelweekly.co.uk/articles/346058/thomas-cook-union-calls-for-liquidation-of-viable-airline-to-be-halted

    I always believed that the duty of the bankruptcy proceedings was to try and maintain the profitable parts working – more like the way the US uses bankruptcy protection. It seems to me the whole process has been done with indecent haste. That makes me suspicious about some elements doing friends a favour by taking excess capacity out of the market.Remember that Thomas Cook sought US bankruptcy to protect itself from some investment funds who were betting on the company going broke – which it did – so they must have made millions
    If that is not so then the bankruptcy laws should be changed so that the US way can be employed.

    I commented previously on this referring to this article on 21-9-19 #965470.
    “Comment: Thomas Cook is on life support, can it survive?”, (Travel Weekly 20-9-19)

    http://www.travelweekly.co.uk/articles/343426/comment-thomas-cook-is-on-life-support-can-it-survive


    SimonS1
    Participant

    If the Thomas Cook Scandinavia and Thomas Cook Condor airlines were profitable and continue to fly, questions are raised about the government closing down the airline Thomas Cook UK. The Unite union claims the airline was profitable as previous financial results showed.
    This article looks at the question more…
    “Thomas Cook: Union calls for liquidation of ‘viable’ airline to be halted”, (Travel Weekly 10-10-19)

    http://www.travelweekly.co.uk/articles/346058/thomas-cook-union-calls-for-liquidation-of-viable-airline-to-be-halted

    I always believed that the duty of the bankruptcy proceedings was to try and maintain the profitable parts working – more like the way the US uses bankruptcy protection. It seems to me the whole process has been done with indecent haste. That makes me suspicious about some elements doing friends a favour by taking excess capacity out of the market.Remember that Thomas Cook sought US bankruptcy to protect itself from some investment funds who were betting on the company going broke – which it did – so they must have made millions
    If that is not so then the bankruptcy laws should be changed so that the US way can be employed.

    I commented previously on this referring to this article on 21-9-19 #965470.
    “Comment: Thomas Cook is on life support, can it survive?”, (Travel Weekly 20-9-19)

    http://www.travelweekly.co.uk/articles/343426/comment-thomas-cook-is-on-life-support-can-it-survive

    I thought the role of the receiver (or liquidator) was to get the best deal possible for creditors. That may or may not involve running the business or selling off parts as a going concern (which in effect is what has happened with the high street shops).

    I also thought that the purpose of Chapter 11 in US was to allow for a restructuring in order to create a viable business which could service its debts. From what I have read about Thomas Cook the chances of that happening were little to zero.

    In any case if the holiday business was shut down the airline would presumably become unprofitable quite quickly…..


    FaroFlyer
    Participant

    If the Thomas Cook Scandinavia and Thomas Cook Condor airlines were profitable and continue to fly, questions are raised about the government closing down the airline Thomas Cook UK. The Unite union claims the airline was profitable as previous financial results showed.
    This article looks at the question more…
    “Thomas Cook: Union calls for liquidation of ‘viable’ airline to be halted”, (Travel Weekly 10-10-19)

    http://www.travelweekly.co.uk/articles/346058/thomas-cook-union-calls-for-liquidation-of-viable-airline-to-be-halted

    I always believed that the duty of the bankruptcy proceedings was to try and maintain the profitable parts working – more like the way the US uses bankruptcy protection. It seems to me the whole process has been done with indecent haste. That makes me suspicious about some elements doing friends a favour by taking excess capacity out of the market.Remember that Thomas Cook sought US bankruptcy to protect itself from some investment funds who were betting on the company going broke – which it did – so they must have made millions
    If that is not so then the bankruptcy laws should be changed so that the US way can be employed.

    I commented previously on this referring to this article on 21-9-19 #965470.
    “Comment: Thomas Cook is on life support, can it survive?”, (Travel Weekly 20-9-19)

    http://www.travelweekly.co.uk/articles/343426/comment-thomas-cook-is-on-life-support-can-it-survive

    I thought the role of the receiver (or liquidator) was to get the best deal possible for creditors. That may or may not involve running the business or selling off parts as a going concern (which in effect is what has happened with the high street shops).

    I also thought that the purpose of Chapter 11 in US was to allow for a restructuring in order to create a viable business which could service its debts. From what I have read about Thomas Cook the chances of that happening were little to zero.

    In any case if the holiday business was shut down the airline would presumably become unprofitable quite quickly…..

    A Receiver and Liquidation are totally different. Essentially, a Receiver runs the business, at their personal, or corporate, risk, with the aim of recovering all their own costs and having something left over for preferred creditors then unsecured creditors. They are able to use assets of the business, including cash in the bank, to achieve this. Liquidation takes place when there are insufficient assets in the business for a Receivership, or Administration, to take place. In TC case the directors admitted there was only enough cash for 2 weeks, so the business went straight into Liquidation. Similar to Carillion, a couple of years ago.

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