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Thousands face airline cash loss | |
(about 5 hours later) | |
Thousands of customers owed money by failed airline Flyglobespan may only get 5% of their fares back. | |
Flyglobespan, which was Scotland's largest airline, went bust last year, along with the Globespan travel agency. | Flyglobespan, which was Scotland's largest airline, went bust last year, along with the Globespan travel agency. |
About 40,000 people, including hundreds of staff, were owed money or were left with worthless tickets. | |
PricewaterhouseCoopers said customers who paid by credit card or Visa debit could claim compensation but up to 8,000 others may receive just 5%. | |
The administrators for the airline outlined the situation to creditors during a two-hour meeting at the Caledonian Hotel in Edinburgh. | |
Around 80% have either claimed or are entitled to claim their money back through consumer credit regulations or Visa debit protection cover Bruce CartwrightPricewaterhouseCoopers | |
Customers using credit cards and Visa debit were protected and can claim money back. About £12m has already been recovered through consumer protection schemes. | |
The average amount repaid was between £350 to £400. | |
Hundreds of suppliers, from newsagents to hotel chains, are also still waiting for their bills to be paid, as are some of the staff who lost their jobs. | |
Many who were on agency contracts have not been fully paid. | |
Bruce Cartwright, from PricewaterhouseCoopers, said: "We can confirm that in terms of individual members of the public who had booked travel with the firm and our creditors, around 80% have either claimed or are entitled to claim their money back through consumer credit regulations or Visa debit protection cover." | |
He said there was up to £3m in outstanding payments still to be repaid to other affected creditors. | |
Customers who were not covered by protection, known as "unsecured creditors", can only expect to receive about 5p back in every pound spent. | |
Online transactions | |
PricewaterhouseCoopers are still trying to recover money from E-Clear, the company which had been handling Globespan's online transactions. | |
It had been withholding £34m from the airline. | |
Administrators for E-Clear are still trying to find a total of nearly £100m left owing when it was also forced out of business. | Administrators for E-Clear are still trying to find a total of nearly £100m left owing when it was also forced out of business. |
Flyglobespan, which was based in Edinburgh, collapsed in December. | |
When it went bust an estimated 3,400 holidaymakers were left stranded in Spain, Portugal, Cyprus and Egypt. | When it went bust an estimated 3,400 holidaymakers were left stranded in Spain, Portugal, Cyprus and Egypt. |
PricewaterhouseCoopers said it would take up to two years to process all the Flyglobespan claims and called for better regulations to protect customers in future business failures. |