Globespan Group, the company which owns budget airline Flyglobespan and tour operator Globespan, has entered administration.
Staff were informed of the Edinburgh-based company's collapse this afternoon. Three administrators have been appointed including PricewaterhouseCoopers and two local Scottish firms.
The group employed 800 staff - most of whom have now been made redundant - and had a fleet of 10 aircraft. It offered flights and package holidays from Scotland to destinations including Spain, Portugal, Turkey and Egypt.
Earlier this week, Globespan Group said it was awaiting funding from Halcyon Investments, a Jersey-based investment company controlled by E-Clear, an online credit card payment processing business.
Bruce Cartwright, joint administrator and head of business recovery services at PricewaterhouseCoopers LLP in Scotland, said: “Despite difficult trading conditions, the company has successfully implemented a number of steps to refine operations and focus on core profitable business. Unfortunately a lack of confidence in the sector following the demise of other airlines resulted in a reduction of liquidity to fund the ongoing operations.
“The directors have sought to overcome this lack of liquidity by seeking additional funding from a third party in recent weeks but this has ultimately been unsuccessful."
Roger Allard, The All Leisure Group chairman, who masterminded the huge XL Leisure Group repatriation in September last year, is understood to be working with the Civil Aviation Authority.
Up to 5,000 customers are currently abroad and the CAA is working to provide those who were on an ATOL protected package with replacement flights home.
A source said the biggest issue will be for the flyglobespan customers whose money is not protected and the claims they will make against the firm`s credit card clearing house E-Clear.
The collapse of Globespan did not come as a surprise to industry watchers who had been warning of another big airline/operator casualty for months.
Globespan Group has sounded upbeat of late, releasing encouraging financials and agreeing lucrative deals to lease aircraft to the Ministry of Defence.
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