The Globescan travel services company which owns the Flyglobespan airline – Scotland's largest – has effectively been placed into bankruptcy administration following a lack of funding. Around 5,000 passengers have been impacted by the collapse

which will have an adverse affect on passenger levels at both Edinburgh and Glasgow Prestwick airports in particular.

Flyglobespan carried over 1.5m passengers with 10 aircraft last year and its fast growth has assisted Edinburgh and Glasgow airports in recent years. But the company's directors called in the administrators yesterday when it became clear that its operating cash flow was insufficient.

The Civil Aviation Authority (CAA) is now taking care of the repatriation of those who have booked flights as part of a Globespan package holiday under the Air Travel Organisers' Licensing (ATOL) scheme.

However, customers who booked Flyglobespan flights directly with the Group via the website or the call centre will not be protected, while those who paid with a credit or debit card can claim from their card issuers.

800 EMPLOYEES TO BE MADE REDUNDANT
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. The Directors have therefore concluded with regret that the business can no longer continue to operate.’The administrators confirmed yesterday that the majority of the workforce – around 800 -will be made redundant.

Flyglobespan operated mainly from Edinburgh, Glasgow Prestwick and Aberdeen, but also flew transatlantic services from other UK cities, including Manchester, Gatwick and Belfast.According to reports, low-cost carriers easyJet and Ryanair are now offering so-called 'rescue' fares for passengers left stranded at airports where these carriers also operate services.