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Tour operators gain advantage as FTI goes bankrupt.

European tour operator FTI's insolvency creates disturbances, yet travel expert Kirstges anticipates that individuals will continue to vacation.

Europe's third largest travel group, FTI, has filed for insolvency at Munich Local Court.
Europe's third largest travel group, FTI, has filed for insolvency at Munich Local Court.

Travel industry - Tour operators gain advantage as FTI goes bankrupt.

According to tourism expert Torsten Kirstges, the travel industry is still thriving even though FTI Group is facing insolvency. While the Corona crisis has left some businesses with significant debt and bank loans, people are still traveling, and high-priced trips and cruises are on the rise.

Kirstges, a professor at the University of Jade in Wilhelmshaven, believes that other travel organizers may profit from FTI's bankruptcy. "Despite the FTI insolvency, people will continue to travel," he predicts. "The cake worth billions of dollars will simply be divided among other organizers. There won't be any noticeable disruption in the overall number of trips by next year."

FTI Group has been struggling financially for some time, with a weak balance sheet in 2022, among other issues. The travel restrictions during the pandemic further exacerbated the company's situation. FTI was considered less profitable and had a low equity capital. The company relied on state aid during the pandemic, which they now have to repay.

Instead of accepting the offer of fresh capital from a consortium, FTI filed for insolvency at the Munich District Court. The consortium, led by US financial investor Certares, wanted to purchase the FTI Group for one euro and inject 125 million euros into the company. However, this deal needed approval from the antitrust authorities.

Reports suggest that FTI's booking figures have been disappointing recently. "In addition," the company said, "many suppliers were demanding advance payments, which increased liquidity requirements and couldn't be covered until the investor process was closed."

Read also:

  1. Despite FTI Group's financial struggles and insolvency, the travel industry, specifically tour operators, are seeing an opportunity to gain market share.
  2. Torsten Kirstges, a professor at the University of Jade in Wilhelmshaven, believes that FTI's bankruptcy could lead to a redistribution of the tourism market, with other tour operators benefiting from the situation.
  3. The travel restrictions caused by the Coronavirus pandemic did not deter people from traveling, and high-priced trips and cruises have seen a rise in popularity, despite some businesses facing significant debt and bank loans.
  4. The high-priced trips and cruises have been a silver lining for the travel industry, as Germans continue to vacation despite the challenges faced by some tour operators.
  5. FTI Group, a tour operator based in Germany, filed for insolvency at the Munich District Court rather than accepting a 125 million euro investment from a consortium led by US financial investor Certares, due to the need for antitrust authority approval and liquidity issues caused by advance payments from suppliers.

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