Sunday, 4 December 2011

CAA takes specialist advice over Thomas Cook situation

The Civil Aviation Authority (CAA) has hired US firm Alvarez & Marsal to offer advice on how to handle a major insolvency should the situation at Thomas Cook worsen.

It is a sensible move by CAA as despite receiving £2.50 per passenger as ATOL protection, a problem with a major player such as Thomas Cook would put the CAA under huge financial strain. The organisation is still estimated be £40m in debt after the collapse of large operators such as XL, Goldtrail and Holidays 4U.

A similarly serious prospect for Thomas Cook is for CAA to revoke the airlines Air Operator's Certificate (AOC). This could potentially happen if Thomas Cook's financial problems pose a threat to aircraft safety.

The final risk that A&M is likely to be helping the CAA with is if Thomas Cook was to be broken up as part of a restructure programme. The CAA will be keen to protect their own interests and ensure that its income from their scheme will be protected and maintained should such a process take place.

Commenting on the issue, the CAA were predictably cagey: "We never comment on the financial position of any ATOL holder. Anybody who books an ATOL-protected holiday in the UK can be confident their money is fully protected by the CAA."

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