FlyGlobespan 'owed £30m by credit card firm'
Collapsed airline's administrators make 550 staff redundant
Friday 18 December 2009
Administrators dealing with the winding up of airline FlyGlobespan are investigating why a "significant" amount of money from credit card bookings has not been paid to Globespan. The sum, thought to be between £30m and £35m, has been held by payment-processing firm E-Clear, which handled Globespan's credit card transactions. It is believed to be about double the amount needed to be paid to credit card customers whose flights were cancelled before they took off.
Bruce Cartwright, of PricewaterhouseCoopers (PwC), which has been called to manage the administration, wouldn't say whether the amount being held by E-Clear contributed to the airline's collapse, and said his immediate priority was getting people home. PwC made 550 Globespan staff redundant yesterday, retaining 100 to deal with the winding up of operations.
It is believed the money withheld may have been for flights yet to take off. When airlines XL and Zoom collapsed last year, the insurance industry made it much more expensive for credit card companies to cover that insurance cost. Since then, delays in payment have become more common as a means of insuring tickets.
Several airlines mounted an emergency operation yesterday to repatriate about 4,500 holidaymakers left stranded by the collapse. Ryanair and easyJet offered discount fares and laid on extra services from Spain, Portugal, Cyprus and Egypt.
Many more Globespan staff left overseas in India, the Middle East and Ascension Island are slowly being repatriated. Some 60 staff in Delhi have been given free flights home by Virgin, while Air Italy has temporarily taken over Globespan's "air bridge" flights for British troops based in the Falkland Islands.
Globespan also had a special contract to shuttle Muslim pilgrims between Delhi in India and Saudi Arabia. Some of the airline's female crew are thought to be stranded in Saudi Arabia, and will face tight restrictions on where they are allowed to go.
There were chaotic scenes at Scottish airports yesterday as many Globespan passengers arrived to find their flights cancelled.
Gino Giannico, 75, and wife, June, 77, a retired couple from Dundee, had paid £1,600 for a package holiday to Alicante but had not heard of Globespan's collapse. "I'm blazing mad. They've obviously not just known about this yesterday – they must have known earlier," said Mr Giannico.
The Civil Aviation Authority has guaranteed to repatriate the 1,100 people who bought Globespan package holidays under an industry scheme. The 3,500 others who bought flights online will have to buy new tickets home and recoup their lost money from their credit card companies.
Fiona Farmer, the regional officer for Flyglobespan with the Unite union, said: "We are in urgent discussion with the receivers on this issue."
PwC advised Globespan customers to call new helpline numbers 0141 332 3233 or 0131 466 7612.
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