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Flyglobespan goes into administration

It has been revealed this evening that Scotland's biggest airline, Flyglobespan, has been placed into administration after experiencing severe financial difficulties. The airline, which operated 12,000 flights last year and carried more than 1.5 million passengers, had been in talks with a Jersey-based investor about a potential cash injection although these talks broke down early today.

This is yet another bitter blow to the UK airline industry which is already under pressure with news that British Airways cabin staff will soon be starting a 12 day program of strike action against employment changes within the group. While the Civil Aviation Authority (CAA) is working on bringing home 1,100 stranded travellers, a further 3,400 customers who booked directly through Flyglobespan will not be covered by the ATOL insurance scheme and will be forced to make their own arrangements.

There are also around 117,000 customers who have paid for future travel arrangements through Flyglobespan, with 27,000 covered by the ATOL insurance scheme although a further 90,000 have no protection and are likely to lose their money. It will be interesting to see if the UK government steps forward with any rescue funding for the industry because many believe that now Flyglobespan has gone there may be other airlines in the UK in a similar situation.

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