Flyglobespan could have been saved, says Swinney

Published on Friday 18 December 2009 22:09

FAILED airline Flyglobespan would have had a better chance of survival if it had been paid the tens of millions of pounds it was due, finance secretary John Swinney said yesterday.

Mr Swinney claimed the company had been "badly let down" as it had not received 34 million from a credit card handling company.

Efforts were continuing yesterday to fly home staff who had been stranded around the world after the Globespan Group went into administration when it failed to get funding to keep it afloat.

Administrator Bruce Cartwright, of Pricewaterhouse-Coopers (PWC), had revealed the collapsed travel firm had been due about 30m from a third-party booking agent.

Mr Swinney said had it access to even part of the cash, the current situation could have averted.

"Flyglobespan were owed 34m by a credit card handling company," he said. "And 20m of that money, beyond dispute, without a word of question, should have been in Flyglobespan's bank account and that would have assisted their liquidity problems."

He said there were "massive issues which must be examined" about the performance of the credit card handling company E-Clear.

The finance secretary insisted: "This company has been badly let down by the fact that a private company, handling bookings on their behalf, has not paid them money that they were due. That is the inescapable commercial reality of what has been faced here."

Mr Swinney said Holyrood transport minister Stewart Stevenson had met Flyglobespan bosses in September, adding that the company had said then that "they had the expectation that they would need to borrow some more money to sustain some of their activities".

And the finance secretary said the collapse of the Scottish-based firm was "a very difficult time" for the company's employees. PWC had said that there was no choice other than to cease flights and make redundancies.

Mr Swinney explained how the Scottish Government was acting to help.

"We have specialists who support people who lose their jobs to find alternative employment; that's called the Pace team – Partnership Action for Continuing Employment – and they are now actively engaged in taking forward the options and opportunities for members of staff who have lost their jobs."

He also said Holyrood ministers would be pressing the Westminster government to extend the Atol travel protection scheme to include flight-only bookings.

The Civil Aviation Authority (CAA) said that there were 1,100 Atol-protected people involved – mainly those who had travelled on Globespan package tours – and that they would be likely to return home close to the time of their original dates.

He added that many of the airlines were offering cheap fares to those who were not Atol protected to help them get home.