The demise of Thomas Cook has hastened the urgency of taking forward reforms in the area of airline insolvency.
The Government announced in the Queen’s Speech on 14 October, that it would be taking forward an Airline Insolvency Bill. This Bill would provide for a special administration regime, alongside other reforms to enable the Civil Aviation Authority to have greater oversight of airlines in distress. This is the first step to protect passengers and the interests of the taxpayer in the event of future airline insolvency.
In addition, the Secretary of State for Business Energy and Industrial Strategy has written to the Financial Reporting Council (FRC) to ensure they prioritise, as a matter of urgency, an investigation into both the causes of the company’s failure and the conduct of its directors. The FRC will conduct a robust investigation into the preparation of the company’s accounts in compliance with these standards and seek areas where lessons may be learned.