Travel agency FTI seeks bankruptcy protection.

Visiting Places for Leisure - Travel agency FTI seeks bankruptcy protection.

The third-largest travel business in Europe, FTI, has declared bankruptcy. On Monday, FTI Touristik GmbH, which is the parent company of the FTI Group, filed for bankruptcy at the Munich District Court. They stated, "We're working to ensure that ongoing trips end when planned." Those trips that haven't begun may not take place after Tuesday (June 4th), or they might only partially go ahead.

Initially, it's just the tour operator brand FTI Touristik that's impacted. More bankruptcy applications will be filed for other group companies in the future.

Things looked safe for the company as it got 595 million euros in government aid from the Economic Stabilization Fund during the Coronavirus pandemic. A consortium led by US investor Certares planned to acquire the FTI Group for one euro while investing an additional 125 million euros into the company. But, competitors had to agree to the deal.

However, the company recently reported that booking numbers were much lower than expected. Plus, several suppliers demanded immediate payment. This created a heightened need for cash, which couldn't be covered until the investor process ended. "Handelsblatt" reported that there was a sudden liquidity gap of millions at FTI. The government denied additional aid for the company over the weekend.

The newly formed German Travel Security Fund will now step in. It's there to reimburse customer prepayments, transport stranded tourists, and house them until they can travel home.

The FTI Group, with approximately 11,000 employees, has struggled due to the pandemic. It's a major crisis for the travel industry. Last year, the company, the third-largest European travel company after TUI and DER Touristik, bounced back due to increased demand. In the 2022/2023 fiscal year, the company saw a 10% increase in sales, reaching 4.1 billion euros, and had a profit in the low double-digit millions. The company didn't provide more details about the profit. The largest shareholder was the Egyptian investor family Sawiris.

Read also:

1. The bankruptcy filing of FTI Touristik GmbH at the Munich Local Court is a significant blow to the travel industry in Germany.
2. Despite receiving 595 million euros in aid from the German economic stability fund during the Coronavirus crisis, FTI Group, the parent company of FTI Touristik, has faced insolvency.
3. As a financial investor, Certares had planned to acquire the FTI Group for one euro and invest an additional 125 million euros, but the deal was dependent on approval from competitors.
4. The sudden liquidity gap at FTI has been a major challenge, and despite the company's strong performance in the past, it has struggled to overcome the financial consequences of the pandemic.
5. The newly formed German Travel Security Fund will now intervene to help reimburse customer prepayments, transport stranded tourists, and provide temporary housing until they can return home.
6. With over 11,000 employees, FTI Group is one of the largest players in the European tourism industry, and its recent bankruptcy filing has sparked concern about the future of travel security funds.
7. As a result of the pandemic, many travel groups have faced financial hardship, and the insolvency of FTI Group is evidence of the widespread impact of the Coronavirus on the European tourism sector.
8. With increased travel restrictions and a decrease in demand for international travel, the European tourism industry has been thrown into chaos, and many companies like FTI Group are struggling to adapt to the new normal.

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