Tourism industry expert speaks out. - Other tour operators profit from FTI's bankruptcy.
According to tourism expert Torsten Kirstges, the travel industry is largely thriving despite the collapse of the FTI Group. The Corona crisis had left debts and bank loans, but people are still traveling, high-priced vacations are becoming popular again, and cruises are experiencing a boom. Tourism researcher Torsten Kirstges from the University of Wilhelmshaven believes that the remaining organizers could potentially benefit from the FTI insolvency. "Despite the FTI insolvency, people will continue to travel, and the billion-dollar market will be shared among other operators." By next year, no more signs of chaos should be evident in terms of the overall number of travelers.
In recent times, FTI's credibility in the sector had dwindled, among other reasons due to a weak 2022 balance sheet, said Kirstges. "FTI was quite aggressive with pricing and made a moderate profit on each trip with a low equity capital." The travel bans during the Corona pandemic had ultimately led the company into significant financial trouble. The third-largest European tour operator, after TUI and DER Touristik, had relied on state aid, which needed to be repaid. FTI had received approximately 600 million euros from the Economic Stabilization Fund.
On Monday, the Europe's third largest tour operator FTI filed for insolvency at the Munich District Court. A consortium led by US financial investor Certares aimed to buy the FTI Group for one euro and invest 125 million euros into the company. The opponents needed to agree to the deal. However, FTI admitted that their recent booking figures were far from expectations. In addition, various suppliers were requesting advance payments. Consequently, the company faced an inflated liquidity demand that could not be met until the closing of the investor deal.
FTI enters insolvency proceedings.
