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article imageScotland's Biggest Airline is Placed in Voluntary Administration

By Miroslav Kucera     Dec 17, 2009 in Business
Thousands of passengers and holidaymakers will have tough time to get back home as the Scotland´s biggest airline, Flyglobespan, was placed in administration.
Flyglobespan is the Scotland´s largest holiday charter and low cost airline based in Edinburgh. The company got in troubles due to suffering liquidity issues. All flights operated by Flyglobespan were cancelled and will not be rescheduled.
There are affected not only passengers of Flyglobespan but also of Scottish travel company The Globespan Group plc and Alba Ground Handling Ltd. The Flyglobespan official website says that the appointed Joint Administrators were not able to find a way how to continue the operations and were obliged to cancel all flights and keep all the air crafts on the ground. This decision left about 5,000 travellers abroad and 800 employees jobless.
A lot of passengers left abroad or at the airports are claiming that they don´t have any information from the company. Also staff said they are in same position and cannot help. Tom Maguire, a senior cabin crew member said: “I have been with them for five years and they haven’t even bothered to contact us.”
The company traded as both Globespan holidays and Flyglobespan, but only those who booked a package deal through Globespan will be protected.
The Civil Aviation Authority confirmed that it would arrange return flights for 1,100 currently on package deals. But 3,400 tourists who booked flights or accommodation separately will face paying for another flight home. Ryanair and easyJet, budget airlines, stepped in with return flight offers to the airline’s passengers who are left on their own.
Furthermore there are 117,000 people who have booked Christmas breaks with the company but will stay at home but only 27,000 of them will be able to get the money back from the Air Travel Organiser´s License scheme as they bought the holiday package. Another 90,000 people who had booked only flights are at risk to lose what they have paid. Those who paid online using debit cards are most likely to lose their money
The airline has been hit by high fuel costs and has struggled to keep passenger numbers up during the recession. It had looked to have turned a corner when it announced a profit of £1.2 million for 2008-09 after recording a £19 million loss the previous year.
On Monday, this week Flyglospan had denied information about the financial crisis saying that they are closing a funding deal with Halcyon Investments Ltd, a corporate financing firm. But in the end the company failed to finalize a multi-million-pound rescue package.
Bruce Cartwright, of PricewaterhouseCoopers LLP in Scotland, who is joint administrator, said: Unfortunately, a lack of confidence in the sector following the demise of other airlines resulted in a reduction of liquidity.
Paul Clark, the Transport Minister, urged all affected passengers to benefit from special repatriation fares. He hopes that all left abroad will be able to get home Christmas.
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