The failure of Thomas Cook - wider lessons across public transport

The model under which we transport people around, with private companies running for the profit of their shareholders, is designed to be effective by having competition between rivals, intending to ensure that the prices are kept down and the organisations run efficiently for the good of the customer. It also means, though, that weaker private companies are sold / taken over by others from time to time, services that are socially "vital" disappear on occasions, and that there are major shockwaves on occasions when a private company does not make a profit, nor does it sell to anyone else with deeper pockets to "have a go" (that "anyone else" including government bodies).

The model also tends to lead to multiple (sometimes many) providers in a field – not necessarily the same, more likely just overlapping, each with their own ideas, charging / fare / ticket systems, sales outlets, etc... with very limited interaction, sharing, networking. They are discouraged by the likes of the Competition and Mergers Authority, looking to prevent monopolies and cartels, with the dangers of price fixing, limited and stale products, and new players being kept out of the market.

The failure of Thomas Cook is not a new type of event, not a unique happening, and not the sort of thing that is unexpected in the model described above. It comes with the territory. The rescue of British people stranded overseas comes because of the CAA^» / IATA / ABTA / government (? which / how) schemes set up either as a long term insurance in the past, or planned in the short term. Whilst the "blame" is put on the former directors of Thomas Cook, the credit for getting people home will go the government, perhaps encouraged to help people more than they normally might because of where we are in their re-election cycle. 160,000 voters being shown positive government, right?

For the 9,000 UK^▸ staff, a shock – though I suspect that the thoughtful ones weren't taken by surprise. Now – I have (over a working life approaching 50 years) been made redundant twice from a company that was cutting back and both cases were a shock / disappointment / tough period. But looking back at both, they were also a medium and long term positive thing, allowing me to take on fresh challenges in a new and growing, positive role rather than propping up a sinking ship.

Thomas Cook had 5 flights scheduled out of (? Bristol) airport yesterday, whereas EasyJet had 51. TUI^▸ , RyanAir, FlyBMI and others also have a load of flights, so the general "basket" of airline travel to holiday destinations is reduced, but not overall by very much. So those many people who had something booked will be able to find something / fit in with capacity – with that same guarantee of their money in most cases, and further with refunds if they booked through credit cards. Won't pick up everyone, but after some angst, most will get a holiday. The better aircraft (are they leased or owned?) will find new use - I note the quote of old Monarch planes flying for Thomas Cook, and in a similar way some will move on. Except for (perhaps) some end-of-life planes, they won't be out of use for long and cascading might allow someone else to update their fleet.

Thomas Cook owed a lot of money, it seems, to its suppliers. Running a business is a balancing and judgement act - whether to offer credit to people / choosing if you want the business and whether it's worth the risk of trusting that payment will be made. I understand that a number of overseas hotels had an unhealthy proportion of their business with Thomas Cook, and were owed for months of past guests, and they are likely to be in serious trouble not only from past unpaid debts, but also because of ongoing running costs with no (Thomas Cook) business coming in to pay.

I'm noting the other international elements – media tells us on 22,000 staff of whom 9,000 were in the UK – so that's 13,000 outside the British jurisdiction. And also very large numbers of package holidays quoted from Scandinavia and Germany to the Med.

Does the Thomas Cook story on package holidays / flights translate and provide lessons to UK public transport by other modes?

Yes, there are lessons and similarities.

I note repeated failures of the operation of the East Coast franchise in particular. A much stronger government safety net under franchises including an operator of last resort - the government itself - has saved us all from going down to our local station one morning to find there are no trains running. I look at the ups and downs of open access operation that can come and go, and I fear for passengers and communities who come to rely on them; as fill-ins they're fine but as unique providers of the only practical service on flow ...

Bus operators come and go ... Webber Bus, Bodmans and others have folded overnight (as far as passengers are concerned) - again with staff moving on to other operators keen to recruit good drivers. Where a bigger bus company is fighting for its life, strange things can happen that are nothing to do with local business development, and much more to do with making a part of the organisation more attractive to sell. No great secret that First is looking to sell off bus operations, and certain operations are being retuned for the short term, at the price of damaging medium term and beyond development. A lack of investment to cut losses on specific routes, changing marketing plans and ignoring results moving very much in the right direction. Operation "accelerate" to bring a return that was planned for 2 or 3 years time into this current financial year.

What is the solution, then, to providing an efficient, long term, social and economic, modern transport network? Many of the safety nets in place and described above are designed to help round the sharpest corners / most jagged edges of a pure commercia system. But the alternative approach of the whole thing being run by civil servants (nationalisation) leads to many other issues ... I can't say that I personally relish that approach either, as it would so much put it in the hands on the ploiticians on their 5 year popularism cycle.

I write this article from a commcial company's hoiday service - P&O Cruises, now part of Carnival. We travelled from the UK to Canada and the USA on this ship and we're now headed back (see you on 2nd October). Why USA and Canada? Partly because we want to visit the places. Partly because of the date / timings of the journey. Partly to give us an opportunity to catch us with family in New York. But also a measure of it minimising risks - of not travelling with / to what is the rest of the EU^» at a time when (we were lead to believe at time of booking) we would no longer be in the EU. And there's the irony - multiply our case up, and the uncertainty that swayed our plans based on the UK's governmental uncertaintaies - and you find that the goverment - to some measure at least - is one of the factors behind the loss of tourist / holiday trade to Europe, and the catastrophic effect that has contributed to on the oldest name in the package holiday business.