Page last updated at 13:08 GMT, Sunday, 20 December 2009

Swinney calls for investigation into Globespan collapse

Flyglobespan plane on tarmac
Flyglobespan's collapse left thousands of passengers stranded abroad

Scotland's finance secretary has called for a full investigation into the collapse of the Flyglobespan airline.

Thousands of passengers were stranded abroad and 550 staff made redundant when the Edinburgh-based firm went into administration on Wednesday.

John Swinney said any probe should examine the role of E-Clear, which failed to pass on £35m to the airline.

E-Clear also handled credit card transactions for the Allbury Travel Group, which collapsed on Saturday.

Mr Swinney has written to UK Transport Secretary Lord Adonis demanding urgent action so that flight-only passengers can also be covered by a travel protection scheme.

Of the 4,500 passengers stranded abroad, 1,100 customers of Globespan package holidays were covered by the Air Travel Organisers' Licensing (Atol) scheme run by the Civil Aviation Authority, which guarantees refunds and return flights.

Mr Swinney told Lord Adonis he accepted there would be "complexities" in extending the Atol scheme to flight-only travellers.

Finance Secretary John Swinney
Mr Swinney said Atol's scheme should be extended to flight-only travellers

But he said: "The sheer number of travellers involved in non-protected travel arrangements in the Globespan collapse means that this requires to be addressed as a matter of urgency."

Mr Swinney said the UK government was currently consulting on this issue and argued such a change would "give passengers the reassurance they need when booking flights".

He added: "This should be funded, as with the existing scheme, through the industry itself."

The Scottish finance secretary also called for an investigation into the circumstances of the collapse, after administrators claimed that E-Clear, the credit card handling company, owed the airline £35m.

"This is money that should have been in Globespan's account ensuring the company could continue to do business," he said.

"Instead, this Christmas, thousands of passengers have been left stranded across the world and 550 staff are looking for work."

After Flyglobespan went into administration, E-Clear vowed it would work with the administrators to "clarify and address the various complexities around the airline's financial position, so that matters may be resolved as quickly as possible".

Talks took place on Saturday in a bid to "reach an agreement on what is a sustainable minimum fund for E-Clear to hold" to allow it to cover any claims it may have to pay out on from Flyglobespan customers.

'Financial risks'

A spokesman said: "The situation normally is that E-Clear in its dealing with an airline would be covered by business risk insurance.

"Unfortunately it wasn't possible for Flyglobespan to have that kind of insurance.

"That is why the financial risks that E-Clear has been bearing have been very considerable with regards to Flyglobespan."

E-Clear was involved with the Hertfordshire-based Allbury Travel Group, which also operated under the brands Libra Holidays, Argo Holidays and JetLife.

Allbury went into administration on Saturday, leaving some 100 holidaymakers abroad. It also had 4,000 forward bookings.

Scottish First Minister Alex Salmond told BBC Scotland he believed there was a "case for a serious investigation by the department of business regulation".

He added said it needed to look at "the negotiations and the financial structure of Globespan and if indeed money, as is claimed, was being withheld from the company making worse or perhaps even precipitating its cash flow crisis".

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