In a significant blow to the European travel industry, the FTI Group filed for insolvency at the Munich District Court on Monday. The company's collapse puts around 11,000 jobs at risk and has left countless tourists in a state of uncertainty. FTI Touristik GmbH, the parent company of FTI Group, stands alongside TUI and DER Touristik as one of Europe's leading tour operators.
FTI Group, burdened with approximately €1 billion in debt, has struggled to stay afloat since the COVID-19 pandemic. The Economic Stabilization Fund (WSF) previously intervened with a €595 million bailout, but only a fraction of this amount has been repaid. Unlike Lufthansa and TUI, FTI has not managed to fully settle its debts with the WSF.
The Egyptian Sawiris family, FTI's majority shareholders, are now seeking to exit the business, prompting the search for a new investor. In April, the American financial investor Certares expressed interest in acquiring FTI for a symbolic euro, along with an infusion of €125 million. However, this deal fell through due to disappointing booking figures and the need for higher liquidity, leading to a double-digit million euro funding gap.
The German government has declined further financial aid for FTI. The company is attempting to ensure that ongoing trips are completed, but future travels from June 4th are likely to be canceled or partially fulfilled. The Foreign Office has pledged to support affected holidaymakers and is in communication with the German Travel Association and the German Travel Security Fund (DRSF).
Under German law, package holidays are protected by a security certificate from an insurance company or the DRSF. However, this protection does not extend to single service bookings from FTI's various brands. These customers may have to file claims with the insolvency administrator, facing an uncertain outcome.
The DRSF, established post-Thomas Cook bankruptcy, now has over 750 million euros to cover customer reimbursements, return transport, and accommodation for stranded holidaymakers.
Initially, only the FTI Touristik brand is affected by the insolvency, but other group companies are expected to follow. Windrose Finest Travel GmbH, Euvia GmbH, and sonnenklar.TV, along with TVG’s travel agencies, remain operational for now. The timing of FTI's bankruptcy, just before the European peak travel season, poses a significant challenge for the industry, raising questions about the handling of booked capacities with airlines and hotels.
