2024-09-02 12:26:20
Insolvent tour operator
FTI is being wound up – and is laying off most of its workforce
Updated on 02.09.2024 – 13:03Reading time: 3 min.
Three months after the bankruptcy filing, it is clear: Europe’s third-largest tour operator cannot be saved and will be liquidated. This is hitting employees and creditors hard.
The insolvent travel group FTI is sitting on a mountain of debts of one billion euros and is now being liquidated. The Munich District Court has opened insolvency proceedings against the two core companies FTI Touristik and BigXtra Touristik. Insolvency administrator Axel Bierbach is now terminating the employment of 700 employees. Most of the estimated 350,000 creditors are package holidaymakers who are to get their advance payments back from the German Travel Security Fund (DRSF).
According to Bierbach, the situation is different for around 2,500 hotels, travel agencies, airlines, banks and the state Economic Stabilization Fund (WSF). The WSF belongs to the federal government and had lent Europe’s third-largest travel group FTI around 600 million euros during the Corona pandemic. How much money the creditors will one day receive is completely unclear.
FTI filed for bankruptcy in June after customers and travel agencies became increasingly cautious when making bookings, contractual partners insisted on advance payment and the company ran out of money. At the time of the bankruptcy filing, FTI Touristik had around 30 million euros in its accounts, says Bierbach. Because FTI no longer had any money for the obligatory security certificates with the DRSF, “it was clear: we can no longer sell trips.”
Around 60,000 holidaymakers who were travelling with FTI at the time returned without any major problems, and all new departures were stopped. Of the 11,000 FTI employees worldwide, 7,500 are still employed in local hotels, whose business operations continue without restrictions.
Of the more than 1,000 employees in Germany, more than 320 have already found a new job – thanks in part to application days with FTI customers and competitors such as TUIDER, DB or Jochen Schweizer at the FTI headquarters in Munich. Almost 600 employees will be laid off effective September 1st. A further 130 will stay on for a short time to help with the winding up. The operation is to be shut down permanently at the end of the year.
According to Bierbach, the assets of the FTI Group consist primarily of 54 hotels with 12,000 rooms that FTI owns or has leased on a long-term basis. All of these hotels, with one exception, are still operating and are to be sold. There are several interested parties, and negotiations are already at an advanced stage in some cases, says the insolvency administrator.
Of the 110 FTI subsidiaries, some companies with several hundred employees have already been sold, including the luxury travel provider Windrose, the service center Erf24 in Erfurt and the online portal 5vorFlug.
The first creditors’ meeting will take place in Munich on November 20. “I don’t think many will come,” says Bierbach: Most of the 350,000 creditors do not have such high demands on the insolvency administrator that the trip is worthwhile.
“The entire process will take years,” says Bierbach. “It’s a marathon.” Around 175,000 travelers had already paid for their trip in full or in part. Attempts to rebook them with other tour operators failed so shortly before the summer holidays. They receive the money for the package tour from the DRSF – this affects 90 percent of vacationers. However, some package vacationers had booked an excursion, for example. The DRSF does not reimburse the money paid for this; the claim can, however, be filed with the insolvency administrator.
Customers who have booked individual services with FTI can also register their claim in the insolvency table. However, the insolvency administrator appeals to customers to first use the reimbursement channels via the DRSF and payment service providers and not to submit several applications at the same time in order not to block the process.
Travel agencies usually only receive their commission after the customer has departed. What happens if the departure never took place and perhaps no damage was caused because the travel agency sold the holidaymakers another trip instead needs to be examined, says Bierbach.