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Thomas Cook accused of putting costs before customers

Thomas Cook's stated ambition is to put the customer at heart of what it does.

As it stands the customer isn't.

Justin King's review of its business says as much. As the former Sainsbury's boss puts it: Thomas Cook's problem is it "puts finance ahead of doing the right thing for customers".

That was the case nine years ago when Bobby and Christi Shepherd died on a Thomas Cook holiday in Corfu but, in King's view, that remains the case today despite what he calls some "real evidence of change".

What went wrong?

King highlights a number of issues not least that such a colossal and complex business is inevitably difficult to run.

But King also points to the existential crisis the company faced recently.

Four years ago Thomas Cook looked in danger of going under.

Under the then boss, Harriet Green, the company shed staff and closed high street stores.

The clear suggestion is that the focus on cost went too far, Justin King believes that, as it stands, the resources at Thomas Cook's resorts "are often not adequate to deliver on the brochure's promises".

Thomas Cook's new chief executive, Peter Fankhauser, has been in post for one year but he's been at the company for fourteen and was the CEO of UK and Continental Europe business from November 2012.

Thomas Cook's new chief executive, Peter Fankhauser Credit: ITV News

Earlier he told me he didn't realise Thomas Cook had stopped putting the customer at the heart of what it did until May this year when the inquest jury decided the company had breached its duty of care to Bobby and Christi Shepherd.

As far as the cost cutting goes Fankhauser insists the company did what was necessary to survive.

We were really in a difficult situation in 2011/12, here in the UK and this was the balance to find between saving the company and delivering still a good service for our customers.

We had to cut costs, we had to make the business fit for purpose.

– Peter Fankhauser

Thomas Cook is now promising significant investment. Justin King makes 49 recommendations for change, the company in looking at implementing all of them in full.

There will be more reps at resorts, better IT systems (staff on location often aren't able to access the company's own website) and more thorough audits of the hotels where customers are sent.

Every year Thomas Cook takes 20 million people on holiday. Risk can be reduced, it cannot be eliminated.

Every year Thomas Cook takes 20 million people on holiday Credit: ITV News

Justin King's view that a Thomas Cook holiday today is "safer than it's ever been but could be safer still". He believes that the company is heading in the right direction but needs to accelerate the pace of change.

He also points out that many of the challenges Thomas Cook's faces, many of the failings that have been exposed are shared by the entire travel industry.

In the age of the internet, we're building our own holidays online. Package holiday makers face new competition from what King calls "bed brokers".

The consumer has learned to expect package holiday style legal protection and levels of services, we also want rock bottom prices. We don't realise it but we rarely get both.