FTI Bankruptcy: New Opportunities for the Travel Industry Despite Turbulence

The German travel industry remains resilient and robust despite the recent filing for insolvency by the FTI Group. Torsten Kirstges, a renowned tourism expert and professor at Jade University in Wilhelmshaven, sees a positive trend despite debt and bank loans from the COVID-19 period: "Travel remains very popular, especially high-priced trips and cruises are experiencing a strong upswing," he explained to the dpa. Kirstges even predicts that remaining tourism companies could benefit from FTI's insolvency. "People's desire to travel will not be curbed by FTI's insolvency; the billion-dollar market will simply be redistributed among the remaining providers." The overall demand will be just as strong next year, according to Kirstges. However, he added that trust in FTI had significantly suffered recently. "Based on the weak results of 2022 and an overly aggressive pricing policy, FTI achieved only low profits per trip and suffered from insufficient equity." The travel bans during the pandemic ultimately hit the company hard and forced it to rely on government support. FTI, Europe's third-largest travel group after Tui and DER Touristik, had to resort to state aid during the pandemic, which now needs to be repaid. In total, nearly 600 million euros from the Economic Stabilization Fund were provided. After an unsuccessful takeover attempt by a consortium led by US financial investor Certares, which wanted to inject 125 million euros of fresh capital, FTI eventually filed for insolvency at the Munich District Court. Sales figures fell short of expectations, and many suppliers' demands for advance payment led to an acute liquidity problem that could no longer be bridged.