Guarantee fund for the travel industry could help FTI go bankrupt
Published: Tuesday, Jun 4th 2024, 13:20
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The Swiss travel industry's guarantee fund is not worried that the bankruptcy of Germany's third-largest travel provider FTI will overburden it. "If FTI Switzerland were to actually go bankrupt, I am confident that we would be able to cope financially with such a bankruptcy," said Guarantee Fund Managing Director Marco Amos to the tourism portal "Travelnews" on Tuesday.
This was also thanks to the security that FTI had to deposit, Amos continued: "However, FTI Switzerland is not yet bankrupt, unlike the German parent company FTI Touristik GmbH, which had filed an application for the opening of insolvency proceedings at the Munich District Court the day before.
"In this respect, we are not even in the game yet, the contracts are still running as of today. But of course, we are in direct contact and realize that FTI is trying to keep any damage as low as possible," Amos continued.
Customer-friendly payment processing
In addition, FTI provides travel agencies with customer-friendly payment processing and the money is collected relatively late. "This means that the majority of trips will not even be paid for in the future. This means that if the travel agency has requested a deposit from the customer, it can refund the amount directly to the customer," said Amos.
Of course, the travel agency is annoyed because it has to rebook. And the customer is unhappy because they may no longer receive such a favorable travel package, said Amos.
"If a trip that has been arranged and paid for is now pending and cannot be taken, the Guarantee Fund will take action. We will certainly know more about the extent and details of the case in the next few days," said the Managing Director of the Guarantee Fund.
Future actually seemed secure
Europe's third-largest travel group after TUI and Dertour had pulled the plug the day before after months of rescue efforts. According to the information provided, only the tour operator brand FTI Touristik is directly affected by the insolvency application. Subsequently, however, corresponding applications would also be filed for other group companies. The question of filing for bankruptcy for FTI Switzerland therefore appears to be only a matter of time.
The future of the company, which had received a total of 595 million euros in state aid from the German Economic Stabilization Fund (WSF) during the coronavirus crisis, actually seemed secure. A consortium led by the US financial investor Certares wanted to take over the FTI Group for one euro and inject 125 million euros of fresh capital into the company. The competition authorities still had to approve the deal.
According to the information provided, however, booking figures have recently fallen well short of expectations. "In addition, numerous suppliers insisted on advance payment. As a result, there was an increased need for liquidity, which could no longer be bridged until the closing of the investor process," FTI announced the day before.
According to the German newspaper "Handelsblatt", FTI is said to have had a short-term shortfall in cover in the double-digit millions. The German government rejected new state aid for the travel group.
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