Airline threatens to sue over collapse bet

Published on 04/10/2008 20:02

A SCOTTISH airline has threatened legal action against an online betting site after it offered odds on the chances of the carrier going bust.

Flyglobespan, Scotland's low-cost operator, threatened the unprecedented step against a gambling site offering odds of just 11-8 that the airline will be the next to go under.

The Edinburgh-based company last night appeared to have won a victory over Irish bookmaker Paddy Power after the firm suspended bets on who will be the next victim of the world aviation crisis. Paddy Power said it had stopped taking bets because of lack of interest.

Flyglobespan declined to talk about the legal action, but insisted there was absolutely no reason to believe the airline was in trouble.

The firm, which has none of the debt that appeared to kill off travel giant XL and others, is now back in the black, sources said. Millionaire owner Tom Dalrymple said his business was "well positioned" to see out turbulence in the market, not least thanks to its considerable unmortgaged assets, including the Oasis Hotel in Nice.

Paddy Power, which has high street bookies as well as its popular website, has made its name offering odds on novelty and political events, rather than just horse races and football matches.

It is accepting bets on which city will be the first to see riots caused by the economic downturn. New York, home of the Wall Street financial market, is favourite, at 9-4. And it has the SNP at 2-9 to win next month's Glenrothes by-election. It will also give odds of 4,000-1 for Hamilton Accies to win the SPL this season.

A spokesman for Paddy Power, set up by an entrepreneur of the same name, said: "There was some kind of communication from Flyglobespan, but it was not the motivation for us stopping betting on the airline market. We ceased betting because we had turned over the princely sum of ?28 over the last five days."

Aviation industry insiders, however, yesterday told Scotland on Sunday they believed Paddy Power had withdrawn betting on "Which airline will go bust next" because of Flyglobespan's threat.

Dalrymple was deeply concerned with ongoing internet rumours about the firm, most citing the Paddy Power odds. The fear was potential customers might be put off by what Dalrymple called "innuendo".

In a letter to transport correspondents, Dalrymple said his airline – and its parent company, holiday giant Globespan – were "extremely well-positioned to see through the well-documented problems facing the industry at present".

He added: "Without delving into the specific reasons why there have been so many high-profile airline casualties of late, the common denominator seems to be one of debt.

"Flyglobespan has no such problems. We have no debt and, in addition, have substantial cash assets, built up over 30 years over successful trading as the Globespan Group."

Globespan has substantial and unmortgaged properties in Britain, France and Spain.

Dalrymple said advanced sales for next summer were ahead of plan. Flyglobespan has announced expanded operations from Aberdeen and new routes from Glasgow and Edinburgh.