Smith, Susan (2022) Thomas Cook: flightpath to failure. CASE Journal, 18 (6). pp. 863-994. ISSN 1544-9106

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Abstract

The CEO’s apologies were too late. The sudden failure of Thomas Cook Group plc (Thomas Cook), one of the oldest travel firms, on 23 September 2019 left 600,000 holidaymakers stranded and sparked the largest ever peacetime repatriation of British citizens at a cost of £83m to the Department of Transport. Around 9,000 employees who had expected to be paid on 30 September were left unpaid, many of them struggling to pay their bills.

The company went from a clean audit opinion in November 2018 to report a £1.1bn impairment just six months later in its May 2019 interim accounts. At the time of its bankruptcy, Thomas Cook owed £1.7bn in debt to its banks with a further £1.3bn owed to its suppliers. The failure triggered several investigations including an inquiry by the Business, Energy, and Industrial Strategy (BEIS) Committee.

Was the company locked into a flightpath to failure or could Frankhauser have arrested the company’s decline by taking more decisive action?

To what extent could Frankhauser take seek comfort from the presentation of the underlying performance of the company in its audited accounts and the acquired goodwill balances?

Item Type:	Article
Keywords:	Teaching case, Corporate failure, Financial reporting
Schools and Departments:	University of Sussex Business School > Accounting and Finance
SWORD Depositor:	Mx Elements Account
Depositing User:	Mx Elements Account
Date Deposited:	30 Aug 2022 12:38
Last Modified:	25 Nov 2022 09:30
URI:	http://sro.sussex.ac.uk/id/eprint/107590

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