Germany: the large tourism group FTI goes into insolvency. Hundreds of thousands of creditors
The Munich District Court on Sunday opened formal insolvency proceedings for the group, FTI, one of Germany's largest travel agencies, which had to give up at the beginning of June due to excessive debts.
Of the approximately 1,400 employees in Germany, around half are now made redundant, of which around 130 still run the company with administrator Bierbach. The other half kept their jobs selling the group's trips or settled with other tour operators.
According to Bierbach there was no prospect of preserving parts of the travel giant. «There was not enough liquidity and safety certificates could not be issued for travellers. This meant that the package travel business model could no longer be saved." In May FTI was about to be sold to the financial investor Certares for the symbolic price of one euro. The then owner, the Egyptian business family Sawiris, also agreed to make further investments. However, the deal did not go through.
The plan failed as bookings plummeted amid rumors of impending bankruptcy that had long been circulating and many suppliers demanding advance payment. FTI would have needed a sum greater than double-digit millions to survive. “Neither the old nor the new shareholders were willing to fill the liquidity gap,” Bierbach said. The federal government had said it did not want to intervene again after the high level of state aid during the Corona crisis.
The FTI is owed billions to hundreds of thousands of creditors
FTI Touristik and its subsidiary BigXtra currently have debts of over one billion euros to a total of around 350,000 creditors. Most are all-inclusive travellers, around 2,000-3,000 hotels and travel agencies. For package holidays, customers receive refunds from the German Travel Insurance Fund (DRSF), created after the industry's last major insolvency, that of Thomas Cook, at the end of 2021. However, for the German tourism sector it is a disaster.
You should only record claims in the delinquency table if they are not fully compensated by the DRSF. Those who had booked individual services through FTI could first try to get a refund from the payment intermediary. The process and consideration of all requests, including those from the State, will take several years. In the end, not much will come of it, Bierbach explains.
Travel providers: Competitors quickly filled the gaps
The bankruptcy trustee has already found new owners for the luxury tour operator Windrose, the Erfurt service center company erf24, the 5vorFlug brand and shares in the TVG Touristik Vertriebsgesellschaft. Hotel companies in the travel countries own 54 properties, of which only eight belong to FTI, the rest are rented. Since they were only around 20 percent dependent on FTI guests, they were able to continue working quickly.
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Competitors such as TUI, Dertour and Alltours have quickly filled gaps and sold FTI customers new trips . “We are in intensive and advanced negotiations with several bidders and are confident that we will find good solutions for the affected creditors and employees,” Bierbach said. Of the destination agencies in 17 countries, which with around 1,500 employees looked after travelers on site, only a few managed to find new customers.
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The article Germany: the large tourism group FTI goes into insolvency. Hundreds of thousands of creditors comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/germania-va-in-insolvenza-il-grande-gruppo-turistico-fti-centinaia-di-migliaia-i-creditori/ on Mon, 02 Sep 2024 18:12:48 +0000.