Tour operator FTI Touristik faces insolvency.
Due to government support, it looked like German tour operator FTI Touristik was making a comeback. But with decreasing reservations and rejection of federal aid, the company now finds itself in a precarious situation. FTI has declared bankruptcy. Planned trips have been axed, leaving tens of thousands of travelers affected.
EU's third-largest travel company, FTI, has declared bankruptcy. FTI Touristik GmbH, the mother company of the FTI Group, filed for bankruptcy at the Munich District Court on Monday. "At present, every attempt is being made to ensure that already commenced journeys can be finished as scheduled," the company said. Trips not yet started are likely to not take place or be partially completed starting Tuesday (June 4). Initially, only the event organizer FTI Touristik has been hit by this bankruptcy filing. In the future, similar applications will be made for other subsidiaries.
FTI's future seemed stable, as it had received a combined total of 595 million euros in government aid from the Economic Stabilization Fund (WSF) during the Corona crisis. A consortium headed by American financial investor Certares had intended to acquire the FTI Group for one euro and infuse 125 million euros of fresh capital into the firm. The antitrust authorities still needed to approve the transaction.
But, as per the company, the ticket sales have recently fallen short of expectations. "In addition, numerous suppliers have insisted on advance cash payments. Consequently, there was an increased liquidity need that could not be satisfied before the completion of the investor process." According to "Handelsblatt," a liquidity issue of several million euros suddenly cropped up at FTI. The state turned down providing additional aid after negotiations over the weekend.
Now, the German ReiseSicherungsfonds, founded in 2021, is stepping in. It will manage the refund of customer prepayments, the transportation of stranded travelers, and their housing until their return trip.
The ReiseSicherungsfonds was created in reaction to the collapse of travel company Thomas Cook in September 2019. The coverage then only covered a modest portion of the costs, and the state had to step in with millions. The FTI Group, with approximately 11,000 employees, found itself in trouble as a result of the pandemic, which pushed the sector into a grave crisis. Most recently, the company, which is third in EU after TUI and DER Touristik, had experienced a positive turn of events due to heightened demand. The business, in the previous fiscal year 2022/2023, reported a 10% increase in revenue to 4.1 billion euros and a profit in the double-digit million range. The company didn't provide more details on the outcome. FTI's main shareholder was the Egyptian investor family Sawiris.
