The CEO of travel company Thomas Cook on Wednesday personally apologised to the parents whose children were killed by a carbon monoxide leak from a faulty boiler at a Corfu hotel in 2006.
On Sunday, Thomas Cook said it received up to £3.5 million ($US5.4 million) in insurance and legal compensation for costs associated with the death of the two children, Christianne and Robert Shepard, aged 7 and 6.
The company gave half of its legal compensation to charity, after people became angry that the company had received more money from the case than the family had.
But Will Hedden, dealer at London Capital Group, thinks the personal apology and anger over the incident from customers is likely to hit the company over the next year or so (emphasis ours):
“First half results point to a lower seasonal loss than last year, with revenues climbing. The travel operator keeps its full year guidance for a growth in earnings, and states bookings for the key summer period were looking encouraging. The markets will be looking for what the company has to say over the recent bad press following the 2006 deaths in Greece and the compensation debacle.
“Any possible customer backlash following the Greek-related compensation debacle may take until next year’s numbers to show, with this summer’s bookings likely to be already locked down by consumers. Despite pressure this week, the stock will find some support thanks to the stake that Chinese firm Fosun took in March, any real weakness will leave investors thinking the Chinese won’t miss the opportunity to gain more of a holding at a discount.”
Last week, a jury found that Thomas Cook’s health and safety audit of the Louis Corcyra Beach Hotel, where Christianne and Robert Shepherd died in 2006, was inadequate, and led to the travel company “breaching its duty of care” to its customers. However, the court accepted that Thomas Cook was misled by the hotel about the nature of its gas supply.
Thomas Cook’s compensation is 10 times the amount received in a court case by the Shepherd family, which led to growing anger from the family and the travel company’s customers.
In response to this, Thomas Cook pledged to donate pound;1.5 million ($US2.3 million) to charity Unicef, while the remaining amount of compensation would be taken by its insurers to cover the legal costs of the 10 year court case.
“First I want to say that I am deeply sorry about the tragic death of Bobby and Christi Shepherd in 2006. From the deepest of my heart I am sorry.
“It is clear that there are things that we as a company could have done better in the past nine years. In particular, the way we conducted our relationship with the family and this is something that we are going to change.
“We could have done better in the past, we are sorry for that. We are going to try and help them move on with their lives. We did not handle our relationship with the family well. During the past nine years we failed to show the compassion that we should have shown to the family. That is probably the main mistake.”
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