This article is adapted from the business magazine Capital and is available here for ten days. Afterwards it will only be available to read at www.capital.de. Like stern, Capital belongs to RTL Deutschland.
How bad is the third largest German tour operator FTI really? The financial situation has been tense for years and there is constant speculation about possible investors. Now, in the new annual financial statements, auditors are once again questioning the future viability of the company, thereby increasing public pressure.
FTI is trying to counteract reports of impending bankruptcy with reports of future good sales and progress in investor discussions. But none of this promises real security, neither for travel agencies who rely on commissions nor for consumers who are wondering what will happen to their vacation trips.
Anyone who turns to FTI with questions these days will get answers quickly. There are so many rumors in the market right now, and there are also “specifically spread rumors,” “so we thank you very much for your questions,” writes a spokeswoman for Capital. She doesn’t answer the specific questions – about the financial situation, about a possible impending insolvency and about how safe trips that have already been booked are – but generally: the competitors weren’t doing particularly well during the Corona period.
However, the difference between FTI and industry competitors such as the largest German tour operator Tui is that Tui has already fully repaid its national debt and FTI still has hundreds of millions of euros in liabilities on its balance sheet, even though it says it has started repaying it. Tui was also able to raise its equity ratio back to a healthy level with the help of its shareholders, while FTI reported just 2.4 percent of equity in autumn 2022.
This is not only relevant for financial experts, but also for consumers. The equity ratio provides an indication of a company’s risk of default – at FTI it is obviously high. As the new financial statements suggest, it appears to be mainly large loans that are keeping the company from bankruptcy. The new annual financial statements state that FTI’s solvency “could only be ensured in the past financial year through shareholder contributions, government-backed loans and silent contributions as well as loan agreements with banks.”
FTI wrote on Wednesday in an email to all travel agencies that Capital has received that media reports “refer to ‘old’ figures” and that sales are currently increasing. The fact that the high risk of default is real is shown by the fact that FTI has to deposit the maximum security deposit of nine percent with the German Travel Insurance Fund DRSF. The organizer confirmed this to Capital.
The DRSF is also good news for everyone who has already booked trips through FTI and is now afraid of bankruptcy. “FTI is insured against insolvency through the German Travel Insurance Fund,” says the German Travel Association DRV Capital. The North Rhine-Westphalia Consumer Center also points out that payments for package holidays are usually covered – even if the holiday is canceled.
The DRSF also steps in for trips that are now being re-booked via FTI. However, many travel agencies are currently cautious about this, as Marija Linnhoff from the Association of Independent Travel Agencies (VUSR) says in an interview with Capital. According to her own statement, she had called on FTI a few days ago to provide clarity about the future viability of the company. “Colleagues in the travel agencies started asking me whether they could still sell FTI,” says Linnhoff. “Last year they all sold, but now this often only happens at the express request of the customer.”
The reason for this is that many offices fear for their own commission. In Linnhoff’s opinion, FTI bookings are currently primarily made through FTI’s own travel agencies, which include “Sonnenklar”, among others, and through portals such as Check24. With these, customers often don’t even know which organizer is behind the booked trip, which then causes uncertainty later.
“The contractual partner must be named at the time of booking at the latest,” writes the NRW consumer advice center in response to Capital’s request. “Consumers should pay attention to this if they value a particular organizer.”
Linnhoff wants clarity for travel agencies and customers. But she’s not the only one who seems to be increasingly aware that the organizer’s extremely cheap offers, with which he has convinced many customers for years, may now have brought him to the brink of ruin. The search for an investor has been going on since last year, and the Egyptian main owner family Sawiris is apparently not prepared to invest any more money in the company.
In its latest announcement, FTI admits that finding investors is not easy: “The process is complex for a company with more than 4 billion euros in sales and 120 individual companies, many of which are abroad, but is making good progress.” The competition will probably have little sympathy for this.
