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FTI Group, Europe’s third-largest travel provider, declared bankruptcy today following unsuccessful negotiations with the federal government, impacting 11,000 employees and tens of thousands of travelers currently on holiday or with future bookings.
Employees were informed of the bankruptcy during a morning video conference, though booking systems had already failed, ostensibly due to technical issues. The website of Labranda Hotels, owned by FTI, was also taken offline by morning.
FTI management had been in talks over the weekend with the economy and finance ministries, seeking a bailout to bridge a funding gap of several million euros to sustain operations through the summer. However, the federal government rejected the company’s request on Sunday night, according to BILD.
Munich-based FTI had been struggling financially even before the pandemic. It previously received 595 million euros from the government's Economic Stabilization Fund (WSF) and an additional 280 million euros from UniCredit, guaranteed by the federal government and the state of Bavaria. In April, there was a glimmer of hope when U.S. investment firm Centares announced plans to acquire FTI, assuming one billion euros of debt and injecting an additional 125 million euros in new capital. However, this rescue plan was delayed, pending approval from the Federal Cartel Office expected no earlier than August or September, leaving FTI in need of immediate funds.
FTI has assured that efforts are being made to ensure that current holidaymakers can complete their trips and return home without issue. Additionally, the Travel Insurance Fund, established in 2019 after the bankruptcy of Thomas Cook Group, will refund advance payments for packages that are ultimately canceled.
