Düsseldorf The bankruptcy of the tour operator Thomas Cook (“Neckermann”, “Öger”, “Condor”) in September 2019 has cost taxpayers an impressive 106 million euros. The aftermath is now even more expensive for competitors. The hardest hit, as a hearing in the Bundestag legal committee showed a few days ago, is the market leader Tui.
Because the insurance solution that has hitherto been cheap for the industry should be over by November 1st, according to the will of the Federal Ministry of Justice. After organizer bankruptcies, the insurance has only covered the damage with a liability sum of 110 million euros – too little, as was shown in the Thomas Cook case. They are replaced by a travel insurance fund, which can only be used by those who deposit seven percent of their annual turnover as security in advance.
For the Tui this is a special show of strength. At the beginning of 2020, the market leader could no longer find an insurance partner for the 110 million euros required at the time and had to deposit the money in cash. As things stand today, the group would have to provide around 350 million euros for the new security fund – even if the group cannot confirm this figure in view of the pending legislation.
Annual deposit bonuses, which are also based on sales, will be added in the future. If the money is not paid, package tourists like Tui should no longer require travel payments.
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Berlin had benevolently approved the previous minimum protection for years, although the EU has demanded unlimited liability since 1990. According to a Brussels guideline, package travel down payments must be fully secured, as well as the free return home of insolvency-damaged holidaymakers from the holiday regions. Because the federal government stubbornly ignored these requirements, in the end it was liable for any damage that exceeded the insured amount in the case of the Thomas Cook bankruptcy.
The planned “law on insolvency protection through travel insurance funds” should rule this out in the future. But the enormous burdens that it places on the package travel companies are unlikely to serve their own insolvency protection. On the contrary: for many organizers who have been drawing from the substance since the outbreak of the corona crisis, this may only pave the way to bankruptcy.
Accordingly, the industry is trying to shift the impending burdens back onto the taxpayer before the fund is launched. The security deposits should initially not be provided by banks or insurance companies, as planned, but by the state, demanded the online travel association VIR in the Bundestag hearing. Dirk Inger, General Manager of the German Travel Association (DRV), said: “We also have to talk about federal guarantees.”
Impending conflict of interest
In fact, the taxpayer is initially liable anyway if a tour operator goes bankrupt. Because the fund’s assets should only gradually be built up by Tui and Co. transferring one percent of the travel price to him. The state will therefore continue to be liable until the target assets of 750 million euros are expected to be available at the end of 2026.
Not only additional federal guarantees for the collateral to be deposited are therefore controversial. There are also critical voices about the four likely shareholders of the travel insurance fund, which is to be run as a GmbH. The associations DRV, VIR, the SME association ASR and the bus tourism organization RDA have applied to the Federal Ministry of Justice to jointly manage the fund. But industry experts, including the travel agency association VUSR and the Green MP Markus Tressel, member of the Bundestag tourism committee, warn of a conflict of interest.
For example, an implementation provision in the planned law indicates that the travel insurance fund may refuse to protect travel providers “who impose an unreasonable risk on them and suggest a significant burden on the fund’s assets in the foreseeable future”.
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