FTI Group's Insolvency Shocks Europe’s Tourism Sector

Europe's third-largest tour operator, FTI Group, has filed for insolvency in Munich, citing falling bookings and advance payment demands from suppliers. This development threatens thousands of holiday plans at the onset of summer. The German ministries acknowledge the situation's severity but cannot provide further assistance.

Reuters | Updated: 03-06-2024 16:47 IST | Created: 03-06-2024 16:47 IST
FTI Group's Insolvency Shocks Europe’s Tourism Sector
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Europe's third-largest tour operator FTI Group filed for insolvency in the Munich regional court on Monday, the German company said in a statement, as bookings continued to fall even after a recent one-euro buyout proposal.

In addition to sinking orders, multiple suppliers insisted on advance payments, which FTI is no longer able to provide. The group has opened a hotline and a website for customers, the statement added.

It will have to either cancel or complete only partially all trips from June 4, potentially affecting thousands of holidaymakers at the beginning of the travel-busy summer season. The German Foreign Ministry said that the tourism industry and travel insurance fund would take care of repatriating and supporting the tourists affected but that it would provide consular support if necessary to ensure a safe return.

The German Economy Ministry called the insolvency "tragic" adding that it could not provide any additional assistance. The government needs to examine in detail what effect the insolvency will have on the recovery aid funding it had granted FTI during the pandemic, a finance ministry spokesperson said.

"It must be assumed that only small recoveries can be expected from the outstanding claims," the spokesperson said. The government had been awaiting approval for a sale of receivables as the most economical way to claw back the funds before the company filed for insolvency, the spokesperson said.

The return of the receivables is no longer possible after insolvency, the spokesperson added. FTI employs 11,000 people worldwide and offers tours to more than 40 destinations around the world, including through its 10,000 partner agencies in Germany.

In the 2022/2023 financial year, it reported annual sales of around 4.1 billion euros ($4.44 billion). ($1 = 0.9234 euros)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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