News
25.11.2009
The closing down of Budget Travel in Ireland
November 25th 2009
To whom it may concern
As of today, Primera Travel Group has decided to wind down its business in Ireland, as due to the downturn in the Irish economy, it is not viable to continue operating Budget Travel with its current setup.
Primera regrets to announce closing down Budget Travel in Ireland, due to the Aviation Commission in Ireland refusing to extend its license to trade unless Primera would give full unlimited parent guarantee to all possible liabilities of Budget Travel. This effectively hinders Primera to restructure the business in Ireland. Primera will not sign any guarantees that might in the future possibly compromise the strong financial position of Primera Travel Group.
Aviation Comission holds 11.4 million EUR in security deposit towards the license. 4,5 million more than required. This amounts to 6 time’s current exposure of Budget Travel toward its bonds liability. It means that the company is being forced to close down despite having enough funds to cover all of its debt. It means at the same time the unnecessary loss of 170 jobs.
Primera has offered extended guarantees to the Aviation Commission, apart from the cash they are holding, including unlimited guarantee to any exposure to the aviation commission, relating to passenger protection. Primera has offered full financial support of Budget Travel, including all trade liabilities.
In order not to jeopardize Budget's Travel position towards its clients and to its suppliers, Primera has made the difficult decision to close down the company, in order to protect its customers and creditors. All clients of Budget Travel are protected and fully bonded, and all clients currently abroad are fully protected under the bond. Budget Travel will ensure that all passengers currently travelling with the company will not have any disruption to their current travel arrangements.
The closing down of Budget Travel does not in any way affect the operation of other companies owned by Primera. Fortunately all our other companies are profitable and successfully operating in their respective markets.
Sincerely,
Andri M. Ingolfsson
President and CEO
Primera Travel Group
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