German travel group FTI Touristik GmbH, the parent company of Europe's third-largest tour operator FTI Group, has filed for insolvency.
On Monday, the district court in the southern German city of Munich appointed the lawyer Axel Bierbach as provisional insolvency administrator for the parent company.
"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 will be directly affected by the insolvency application. Subsequently, however, corresponding applications will also be filed for other group companies.
Following the insolvency, the German government does not anticipate an extensive state repatriation programme for German tourists, dpa learnt on Monday after a meeting of the crisis team at the Foreign Office in Berlin.
The website of the Foreign Office stated that as FTI is insured against insolvency via the German Travel Security Fund (DRS): Payments made - the entire travel price, if already paid, as well as advance payments - are secured in the event of insolvency. This applies to customers who have booked a package holiday.
It was reported in the industry that around 65,000 holidaymakers were currently travelling abroad with FTI.
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 €1 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-euro range. Following negotiations at the weekend, the federal government denied further aid for the company.
A spokesman for the Ministry of Economic Affairs said on Monday in Berlin that there were budgetary, legal and economic reasons why no further aid beyond the "very many large amounts of aid" had been provided.
German government sources said that in the course of negotiations on the federal government's claims arising from the coronavirus pandemic, it had been agreed that the investor would buy these from the government at market prices. This would have meant losses for the government. However, these could now be significantly higher in the event of insolvency.
Government sources spoke of an expected loss of around 84% is expected.
The ball is now in the court of the DRS fund, which was launched in 2021. In the event of a travel provider's bankruptcy, it is to take care of the reimbursement of customers' advance payments, the repatriation of stranded holidaymakers if necessary and their accommodation until they are repatriated.
The fund, which is organized by the German tourism industry and supervised by the Federal Ministry of Justice, was founded following the insolvency of 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, 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.