Europe’s third-largest travel group, FTI, is running out of money. This is bitter for holidaymakers. The industry’s travel security fund is intended to help them in such cases.
Europe’s third-largest travel group FTI has gone bankrupt. FTI Touristik GmbH, the parent company of the FTI Group, is filing an application for insolvency proceedings with the Munich District Court today, the company announced.
“We are currently working hard to ensure that the trips that have already begun can be completed as planned.” Trips that have not yet begun will probably no longer be able to take place or will only be able to take place in part as of tomorrow, Tuesday (June 4).
According to the information, only the tour operator brand FTI Touristik is directly affected by the insolvency application. However, corresponding applications will subsequently be submitted for other group companies as well.
FTI files for bankruptcy: Tour operator to receive double-digit million amount in the short term
The future of the company, which had received a total of 595 million euros in state aid from the Economic Stabilization Fund (WSF) during the Corona crisis, actually seemed secure. A consortium led by the US financial investor Certares wanted to take over the FTI Group for one euro and put 125 million euros of fresh capital into the company. The competition authorities still had to approve the deal.
According to the information, however, the booking figures have recently fallen well short of expectations. “In addition, numerous suppliers insisted on advance payment. This resulted in an increased need for liquidity, which could no longer be bridged by the time the investor process was closed,” FTI announced. According to the “Handelsblatt”, FTI has had a short-term funding gap amounting to a double-digit million amount. After negotiations at the weekend, the federal government has rejected further aid for the company.
Travel insurance fund to look after holidaymakers
Now it is the turn of the German Travel Insurance Fund, which was launched in 2021. If a travel provider goes bankrupt, it is supposed to take care of the reimbursement of customers’ advance payments, if necessary the return transport of stranded holidaymakers and their accommodation until their return transport.
The fund, organized by the German tourism industry and supervised by the Federal Ministry of Justice, was founded after the insolvency of the travel group Thomas Cook in September 2019. At the time, the insurance company had only reimbursed a fraction of the costs due to a limitation of liability; the state stepped in with millions.
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The FTI Group, with around 11,000 employees, was in trouble during the pandemic, which plunged the industry into a serious crisis. Most recently, the third-largest European travel group after Tui and DER Touristik found itself back on track thanks to increased demand. In the past 2022/2023 financial year, the company recorded a 10 percent increase in sales to 4.1 billion euros and generated earnings in the double-digit millions. The company did not provide any further details on the result. The main shareholder was most recently the Egyptian investor family Sawiris.
Source: Stern
