17-Dec-2009 9:49 AM

Flyglobespan likely to be placed into administration today, flight operations cease

The Globespan Group plc and Alba Ground Handling Ltd (the 'Group') were placed into administration on 16-Dec-2009. PricewaterhouseCoopers (PwC) has been appointed as administrators to the Scottish travel firm. It is likely that other Group companies, including Flyglobespan, will be placed into administration today (17 -Dec-2009). Flight operations ceased on the evening of 16-Dec-2009. The Group employs approximately 800 people and operates a fleet of ten aircraft. The Group is in contact with approximately 5,000 passengers who are expecting to travel to/from foreign destinations during the coming few days. Passengers are being advised to contact the Group helpline to receive updated advice. [more - Globespan] [more - information for passengers]

Flyglobespan was established in 1970 and provided services and package vacations from Scotland's major cities of Glasgow, Edinburgh and Aberdeen to approximately a dozen destinations across Britain and Europe, as well as Orlando, Florida, and the Egyptian resort city of Sharm El Sheikh. Most of the Edinburgh-based company's 800 employees will lose their jobs, with a small number to be retained to help close the company (Associated Press, 16-Dec-2009).

UK Civil Aviation Authority (CAA) has stepped in to protect customers on package holidays. Customers who booked package holidays with Globespan will be protected by ATOL and can complete their holidays. Customers with package holidays who are yet to travel will be able to claim a refund. Airlines are outside the ATOL Scheme, so people who booked directly with Flyglobespan are not protected. Airline customers who were due to fly back to the UK are advised to make alternative arrangements with other airlines. [more - CAA]

Ryanair launched (16-Dec-2009) a GBP89 (one way including taxes and charges) 'rescue fare' for stranded Flyglobespan passengers. This fare applies to flights to/from Edinburgh and Glasgow (Prestwick) until 15-Jan-2010 – subject to availability. Ryanair also pledged to assist with the repatriation of passengers who may be caught up in any future airline collapse and advised passengers, "the best way to ensure travel plans are protected is to travel only with financially secure airlines such as Ryanair". [more - Ryanair]

PricewaterhouseCoopers: “Despite difficult trading conditions, the company has successfully implemented a number of steps to refine operations and focus on core profitable business. Unfortunately a lack of confidence in the sector following the demise of other airlines resulted in a reduction of liquidity to fund the ongoing operations. The directors have sought to overcome this lack of liquidity by seeking additional funding from a third party in recent weeks but this has ultimately been unsuccessful. The Directors have therefore concluded with regret that the business can no longer continue to operate", Bruce Cartwright, Joint Administrator. Source: PricewaterhouseCoopers, 16-Dec-2009.

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