p4-5 News Dec18 16/12/09 22:37 Page 4
18.12.2009
Agents evaluate
ANALYSIS: WHAT WENT WRONG? .
AWARD-WINNING Flyglobespan
grew rapidly over the past five
Globespan fallout
years to become Scotland’s
largest trade-friendly airline,
under the stewardship of its
multimillionaire owner, Tom
Martin Ferguson.
in the market had been created and that Dalrymple (pictured).
TRAVEL AGENTS in Scotland are facing
C
O
average prices would be set to rise. Jimmy Martin, owner and managing director
a “nightmare” task of rebooking tens
STO
VER
“When all this is added up it may of Jimmy Martin Travel, said he had “huge
of thousands of customers who were
R
Y
be a good thing because agents need praise” for what Globespan had achieved in
due to fly with trade-friendly airline more money.” recent years, but claimed the company had
and operator Globespan. The collapse once again highlighted pursued an overzealous expansion strategy.
They faced a mammoth task in working the difference between package bookings “It was raking it in about five years ago with
through high volumes of forward bookings, but and flight-only direct sales. its flights to Barcelona and Nice,” said Martin.
some agents said the collapse could be a bless- The Civil Aviation Authority said some 1,100 “But it wanted too much and it was launching
ing in disguise as it would ease overcapacity in customers abroad who had booked through more routes and frequencies than were needed.”
the Scottish market – and help improve margins. Globespan, many to the Mediterranean and Rumours about Flyglobespan’s financial
Edinburgh-based Globespan Group, which Egypt, were Atol-protected. However, it said health had been rife for nearly two years.
included the Globespan tour operation and another 3,400 who had booked flight-only direct Its relationship with agents also took a knock
Flyglobespan no-frills airline, entered adminis- with Flyglobespan were not and would have to when it developed a reputation for cancelling or
tration on Wednesday night, leaving 4,500 make their own arrangements to get home. changing flights at short notice, which led to it
customers stranded abroad and more than Abta chairman John McEwan said the situation being booed at an SPAA awards dinner last year.
100,000 others facing cancelled holidays. would be “more manageable” than the collapse Bruce Cartwright, joint administrator and head
It collapsed after failing to secure an of XL in September 2008. of business recovery at PricewaterhouseCoopers
investment package from Halcyon Investments, About 27,000 customers had forward book- in Scotland, said the company had recently made
a Jersey-based investment company. ings with Globespan and another 90,000 had changes to focus on its core business.
Jimmy Martin, owner of Edinburgh-based bookings with Flyglobespan. But he said other airline collapses had dented
Jimmy Martin Travel, said Globespan’s demise Other airlines were quick to offer “rescue confidence in the travel sector, resulting in a
had created a “nightmare” situation for many fares”, with easyJet and Ryanair both offering “reduction of liquidity to fund operations”.
companies, with high volumes of forward deals from Edinburgh and Glasgow. Flyglobespan had also been trying to secure
bookings and customers overseas. Jet2.com chief executive Philip Meeson said funds from credit card payment processing
But he predicted it would have a positive long- his airline would now look to expand routes from company E-Clear. Its chief executive, Elias Elia,
term affect on independent agencies. Edinburgh as a result of Flyglobespan’s demise. refused to comment on the situation this week
“Every time somebody goes down, it’s bad However, he said it would “choose carefully” despite repeated requests from TTG.
news,” he said. “But we all have businesses to because he expected 2010 to be as tough a year His firm was rumoured to owe Flyglobespan
run and we have to be realistic. This could bring as 2009. several million pounds. Slovakian airline Sky-
a welcome equilibrium to prices.” Europe, which filed for bankruptcy in September,
Barrhead Travel founder Bill Munro said a gap ■ For the latest on Globespan, see ttglive.com is reportedly chasing E-Clear for £13 million.
Losing altitude: How Globespan was grounded
December 15
A 48-hour extension granted
for airline to find funds
January 2009
Globespan announces
£1.2 million profit
September 2008 December 12
Globespan slams bookmaker Paddy Power Newspaper reports claim
for making it “odds on” to be next airline to Globespan is on the brink of December 16
go bust. The airline claims to be “lean and fit” collapse. Denied by the airline. Placed into administration
04 18.12.2009
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