Thomas Cook donates £1.5m Corfu compensation to children’s charity

Kasmira Jefford
Follow Kasmira
Thonas Cook chief executive Peter Fankhauser arranged for the £1.5m Unicef donation
But critics say it’s too little, too late from the under-fire travel company

THOMAS Cook said yesterday it will donate £1.5m to children’s charity Unicef, after being heavily criticised for claiming a payout from a hotel in Corfu where two children died in 2006.

Robert and Christianne Shepherd died from fumes leaked by a faulty boiler at the Louis Corcyra beach hotel – booked through Thomas Cook.

The holiday firm was cleared of responsibility in 2010 and awarded damages against the hotel’s owner. However, an inquest found last week it had “breached its duty of care”.

The charity donation comes after criticism from the children’s parents, Neil Shepherd and Sharon Wood, who claimed they had not received an apology from Thomas Cook until Sunday.

They also told the Mail on Sunday that they had received a fraction of the £3.5m payout Thomas Cook received.

Shares in Thomas Cook, which is set to report its half-year results tomorrow, fell 3.2 per cent yesterday on concerns over how the company’s handling of the incident could affect its reputation in the long term. Hundreds of people took to Twitter this weekend to call for a boycott and for the firm to transfer the payout to the family.

Panmure Gordon’s David Buik, said: “I am completely and utterly appalled – the apology is all very well, but frankly the whole amount of compensation should go to the family, even though they [Thomas Cook] were exonerated.”

Buik added that he does not expect Thomas Cook to be impacted financially in the longer term, despite a con- sumer backlash in the short term. This was echoed by Numis analyst Wyn Ellis: “While devastating and tragic for the family involved, and not wishing to trivialise the incident in any way, I would not expect it to have a material financial impact on Thomas Cook.

“However, in the short term, the bad publicity may lead to a number of peo ple deciding to book elsewhere, and this could have a detrimental impact.”

Dave King, of reputation management firm Digitalis, said the donation was a case of “too little, too late.”

“It is an appropriate gesture, but it strikes me that Thomas Cook might not have been best advised throughout the process. Had they planned it better, and been advised to the potential media reaction to the claim, they would have perhaps done things better. The fear at this point is that it will be seen as a knee-jerk reaction, which is sad, because of course any donation to charity is good,” he told City A.M.

Earlier in the day, group chief exec Peter Fankhauser issued a statement.

“Thomas Cook has not in any way profited from our claim against the hotel owner,” he said. “In late 2012, we brought a claim against the hotelier for breaching their contract to provide safe accommodation to our customers and to comply with all applicable laws, which was decided in our favour. Today I have made arrangements for the full amount – £1.5m – to be donated in full to Unicef, the world’s leading children’s organisation. I believe this is the right thing to do, and I apologise to the family for all they have gone through.”

Related articles