FTI Group parent files for insolvency

FTI Group parent files for insolvency

News comes just months after injection of €125m in investment

FTI Touristik, the parent company of FTI Group and the third-largest tour operator in Europe, has filed for bankruptcy.

The owner of FTI Group filed an application for the opening of insolvency proceedings in Munich on Monday, June 3. 

The news comes less than one year after FTI Group appointed Karl Markgraf as its new CEO, and just months after FTI announced a €125 million investment from an investor consortium led by Certares.

The company said: “After a lengthy and complex investor process, the entry of a consortium of investors was announced in April 2024. Since then, however, booking figures have fallen well short of expectations despite the positive news. In addition, numerous suppliers have 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. The filing for insolvency has therefore become necessary for legal reasons.”

Sami Doyle, CEO of insurance intermediary TMU Management, commented on the news. He said: “Very sad to see the news about FTI today but it was well known it had been under some pressure for a while now. The circumstances of its failure, despite recent investment, does raise some questions however.

“Mainly does it really serve suppliers to travel companies to place pressure on payment terms knowing that online travel agencies and tour operators will struggle to pass these terms onto their customers

"Online travel agencies and tour operators rightly get criticism, but the vast pressures associated with managing the consumer and their monies gets overlookedThey get caught in the middle," he said.

Regulators should have stepped in to provide assurances and insurances should have been in place to cover the supply chain. Had this been so – and effectively communicated – today’s problem could have been completely avoidable.

Morgann Lesne, partner at Cambon Partners, warned size doesn't matter. He said: “Most considered FTI too big to fail and therefore would not have seen this coming today.

"Right now a lot of those B2B suppliers will be urgently confirming their exposure and legal situation – they can guess, but it might take days to work through to an absolute figure.

He advised: "We shouldn’t count the company out completely though, as it is just possible that a white knight will come in to rescue the company – or even the German government, who stands to lose much with this. Certainly in terms of its strong asset base we’ll quickly see bidders for its extensive business lines.

“Meanwhile competitors of FTI will be conducting speedy analyses to see if they can capture its customer base – watch out for lots of talk about that publicly via targeted advertising and PR, as well as with investors. 

"Perhaps in the next 24 hours even, things move fast in these situations as there is so much at stake.”