Voyages are called off. - FTI travel organization declares bankruptcy.
Europe's third-largest travel company, FTI, has declared bankruptcy. FTI Touristik GmbH, the parent company of the FTI Group, filed for bankruptcy at the Munich District Court today as announced by the company.
"Currently, tremendous efforts are being made to ensure that ongoing trips are completed successfully." However, trips that haven't started yet may not happen at all or only partially from tomorrow (June 4th).
The bankruptcy seems to have only affected FTI Touristik, but future applications are likely for other group companies.
FTI files for bankruptcy: FTI Touristik may get millions in short-term need
At first, it seemed that FTI had a bright future ahead since it received a total of 595 million euros in state aid from the Economic Stabilization Fund (WSF) during the pandemic. A consortium led by US financial investor Certares was prepared to acquire the FTI Group for one euro, providing 125 million euros of fresh capital to the company. This deal required the approval of competitors.
However, it seems that bookings were significantly lower than expected recently. Furthermore, suppliers began demanding advance payments, creating a large liquidity requirement that couldn't be met until the investor's process was finalized. According to sources, a sudden liquidity gap of millions has popped up at FTI. The state refused to provide further aid following negotiations over the weekend.
German Reisesicherungsfonds to handle customer refunds and stranded tourists
Now, the German Reisesicherungsfonds is taking action. It is responsible for refunding advance payments from customers, transporting stranded tourists, and providing accommodation until their travel is back on schedule.
The Reisesicherungsfonds was founded in 2021 after the collapse of travel company Thomas Cook in September 2019. At that time, the insurance company only covered a small portion of the costs when liability limits came into play. The state had to step in with millions.
The FTI Group, with around 11,000 employees, faced distress from the pandemic that sent the industry into a severe crisis. Most recently, the third-largest European travel company seemed to be bouncing back due to increased demand. In the past fiscal year, the firm reported revenue growth of 10% to 4.1 billion euros and a profit in the millions. The company, however, didn't provide any additional details about the result. The main shareholders were the Egyptian investor family, Sawiris.
The COVID-19 pandemic had pushed the industry into a severe crisis, and the FTI Group, with over 11,000 employees, was struggling. However, the company was showing signs of recovery with a turnover increase of 10% to 4.1 billion euros and double-digit million profits in the past fiscal year. The Egyptian investor family, Sawiris, served as the main shareholders.
