Despite an extensive rescue attempt, help came too late for the travel group FTI: the provider and some subsidiaries filed for bankruptcy. Booked trips are not taking place.
Europe's third-largest travel group FTI has gone bankrupt. FTI Touristik GmbH, the parent company of the FTI Group, filed an application for insolvency proceedings with the Munich District Court on Monday, the company announced. “We are currently working hard to ensure that the trips that have already begun can be completed as planned.” Trips that have not yet begun will probably no longer be able to take place, or will only be able to take place in part, from tomorrow, Tuesday, June 4th.
Despite a “lengthy and complex investor process” and the entry of investors, the company could not be saved. The booking figures nevertheless “fell short of expectations”.
According to the information, only the tour operator brand FTI Touristik is directly affected by the insolvency application. However, as the company announced, other group companies will also file for insolvency in the coming days. Windrose Finest Travel with the luxury brand Windrose is not affected.
FTI’s future already seemed secure
The company's future actually seemed secure after it received a total of 595 million euros in state aid from the Economic Stabilization Fund (WSF) during the Corona crisis. A consortium led by the US financial investor Certares wanted to take over the FTI Group for one euro and put 125 million euros of fresh capital into the company. The competition authorities still had to approve the deal.
According to the Ministry of Finance and the Ministry of Economic Affairs, the Federal Government no longer saw any chance of preventing the travel group FTI from going bankrupt by providing another federal subsidy. “There are various reasons – budgetary, legal and economic – why no further aid was provided beyond the very large amount of aid that was already available,” said a spokeswoman for the Ministry of Finance. The government participated in the talks in a constructive and open manner. A spokesperson for the Ministry of Economic Affairs pointed out that this was the final decision.
At the same time, government circles denied that the federal government had only had to raise a double-digit million amount. The federal government had already paid FTI a total of 595 million euros, mainly from the Economic and Stabilization Fund (WSF). “It must be assumed that only small returns from the outstanding claims can be expected,” said the spokesman for the Ministry of Economic Affairs. A spokesman for the Foreign Office referred to talks with the travel insurance fund and the consulates so that holidaymakers are not left alone by the FTI insolvency.
Travel insurance fund to look after holidaymakers
According to the information, however, the booking figures have recently fallen well short of expectations. “In addition, numerous suppliers insisted on advance payment. This resulted in an increased need for liquidity, which could no longer be bridged by the time the investor process was closed,” FTI announced. According to the “Handelsblatt”, FTI has had a short-term funding gap amounting to a double-digit million amount. After negotiations at the weekend, the federal government has rejected further aid for the company.
Now it is the turn of the German Travel Insurance Fund, which was launched in 2021. If a travel provider goes bankrupt, it is intended to take care of the reimbursement of customers' advance payments and, if necessary, the return transport of stranded holidaymakers and their accommodation until their return transport.
The fund, organized by the German tourism industry and supervised by the Federal Ministry of Justice, was founded after the insolvency of the travel group Thomas Cook in September 2019. At the time, the insurance company had only reimbursed a fraction of the costs due to a limitation of liability; the state stepped in with millions.
The FTI Group, with around 11,000 employees, was in trouble during the pandemic, which plunged the entire industry into a serious crisis. Most recently, the third-largest European travel group after Tui and DER Touristik found itself back on track thanks to increased demand. In the past 2022/2023 financial year, the company recorded a ten percent increase in sales to 4.1 billion euros and generated earnings in the double-digit millions. The company did not provide any further details on the result. The main shareholder was most recently the Egyptian investor family Sawiris.
