Thomas Cook loses EC case
Travel company Thomas Cook yesterday lost its epic battle for compensation from the European Commission for preventing Airtours, now called MyTravel, from merging with First Choice Holidays in 1999.
The European Court of First Instance said that Thomas Cook, which now owns MyTravel, was not due any compensation. This was despite its own landmark ruling in 2002 that the European Commission had been wrong to block Airtours’ £950m takeover of First Choice.
“The fact that the court annuls the decision of the Commission prohibiting the acquisition of First Choice by MyTravel does not make the Community liable in damages, since the Commission did not manifestly and gravely infringe Community law,” it said in a statement. Thomas Cook now has two months to appeal the decision.
Manny Fontenla-Novoa, chief executive of Thomas Cook told CityA.M.: “We inherited this case when we took over MyTravel, but it is something we feel very strongly about.
“This is probably not the end of the fight but we will have to consult with our lawyers before making a decision on whether or not to appeal. We think we have a strong case.”
When it finally annulled the decision to block a merger in 2002, the Luxembourg-based court, the second highest in the EU, said the commission’s ruling had been “vitiated by a series of errors of assessment”.
The court had never before annulled a European decision on a merger, but came out with heavy criticism of the decision after a three year campaign by Airtours, led by Slaughter & May, QC John Swift and former Airtours chairman David Crossland.
MyTravel filed a £518m claim for damages the following year, claiming that it had missed out on three years of profit from First Choice as well as incurring £10m in abortive bid costs.
Airtours, subsequently renamed MyTravel, became part of the enlarged Thomas Cook group through a merger in February last year. Thomas Cook said yesterday that its finances would not be affected, as it had not assumed it would receive compensation.