German travel group FTI Touristik GmbH, the parent company of the FTI Group, Europe's third-largest tour operator, has filed for insolvency.
The group filed an application for the opening of insolvency proceedings at a Munich local court on Monday, the company announced.
"We are currently working at full speed to ensure that the trips that have already started can be completed as planned," the operator said in a statement. Trips that have not yet begun will probably no longer be able to be carried out, or only partially, from June 4, the company said.
According to the information provided, initially only the tour operator brand FTI Touristik is directly affected by the insolvency application. Subsequently, however, corresponding applications will also be filed for other group companies.
The future of the company, which had received a total of €595 million ($645 million) in government aid during the pandemic, seemed secure.
A consortium led by the US financial investor Certares intends to take over the FTI Group for one euro and inject €125 million of fresh capital into the company. The competition authorities still have to approve the deal.
However, according to the information provided, 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.
According to financial newspaper Handelsblatt, FTI is said to have had a short-term deficit in the double-digit million range. Following negotiations at the weekend, the federal government denied further aid for the company.
The FTI Group, with around 11,000 employees, had come under pressure during the pandemic, which plunged the industry into a severe crisis.
Most recently, the third-largest European travel group after TUI and DER Touristik was back on track thanks to increased demand. In the past financial year 2022/2023, the company recorded an increase in turnover of 10% to €4.1 billion and generated earnings in the double-digit millions.
The company did not provide further details on the result. The main shareholder was most recently the Egyptian Sawiris family of investors.