DUO ceased trading
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Bust budget airline owed £20m
The administrators of failed budget airline Duo have revealed that the carrier accumulated debts of nearly £20 million before it went bust.
Deloitte said the Birmingham-based company owed creditors around £14 million and is expecting claims of up to £5 million from passengers demanding refunds.
Up to 1,000 of them will be travellers who were left stranded at more than a dozen of Duo's European destinations when the firm went into receivership on Saturday.
Details about the firm's debts were released a day after 260 out of the company's 300 staff, were made redundant.
The majority of cuts hit ground crew, engineers and flight staff based at Birmingham International Airport.
Ten employees based at Duo's second base in Edinburgh have also been axed.
The remaining workers have been kept on to help with recovering funds for creditors.
Andy Peters, a Deloitte administrator, said: "The statement of affairs will show £14 million of existing creditor claims.
"In addition to that we can expect £5 million claims from passengers who have booked and paid for flights."
A Deloitte spokesman said hundreds of travellers had already called a helpline demanding a refund for their tickets, but the administrators have said it is "uncertain" whether their will be sufficient funds to meet the claims.
The administrators of failed budget airline Duo have revealed that the carrier accumulated debts of nearly £20 million before it went bust.
Deloitte said the Birmingham-based company owed creditors around £14 million and is expecting claims of up to £5 million from passengers demanding refunds.
Up to 1,000 of them will be travellers who were left stranded at more than a dozen of Duo's European destinations when the firm went into receivership on Saturday.
Details about the firm's debts were released a day after 260 out of the company's 300 staff, were made redundant.
The majority of cuts hit ground crew, engineers and flight staff based at Birmingham International Airport.
Ten employees based at Duo's second base in Edinburgh have also been axed.
The remaining workers have been kept on to help with recovering funds for creditors.
Andy Peters, a Deloitte administrator, said: "The statement of affairs will show £14 million of existing creditor claims.
"In addition to that we can expect £5 million claims from passengers who have booked and paid for flights."
A Deloitte spokesman said hundreds of travellers had already called a helpline demanding a refund for their tickets, but the administrators have said it is "uncertain" whether their will be sufficient funds to meet the claims.
Join Date: Mar 2002
Location: EDI, LHR, NQY
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Failed airline was flying two-thirds empty
Failed airline was flying two-thirds empty, The Scotsman 8 May
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Shame.
BD Regional is definitely talking to LH about MUC but they're not particularly keen as it would probably just make the existing EDI-FRA a bit thinner. Flybe could clean up on GVA (good strong affluent leisure market plus a bit of biz traffic). SAS in Norway are less keen on Scotland than SAS in Sweden, but EDI-OSL could be good.
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Shame.
BD Regional is definitely talking to LH about MUC but they're not particularly keen as it would probably just make the existing EDI-FRA a bit thinner. Flybe could clean up on GVA (good strong affluent leisure market plus a bit of biz traffic). SAS in Norway are less keen on Scotland than SAS in Sweden, but EDI-OSL could be good.
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Sources close to Duo said the six European routes from Scotland were "more promising" than the flights from its own base in Birmingham, and that a major new promotional push was in the pipeline before the financial backing fell away. The company had received extra cash and was counting on getting a further £1 million to stay airborne.
The insider said: "Scotland was Duo’s strong point and some of the routes were potentially very lucrative. The Birmingham market had tough competition. It was not the performance of the routes that sank Duo. The fact is you need very deep pockets to run an airline and there wasn’t the financial backing required for the whole operation."
I don't know if the article is good for EDI or not. The title doesn't suggest so, but then the quote above does.
It spells out that duo were unlucky to go, and I feel it is a shame that they are gone and didn't even make it to summer.
Loads at EDI were improving nicely each month on all their routes, but obviously not fast anough!
A well established airline will make easy money out if duo's routes from EDI.
The insider said: "Scotland was Duo’s strong point and some of the routes were potentially very lucrative. The Birmingham market had tough competition. It was not the performance of the routes that sank Duo. The fact is you need very deep pockets to run an airline and there wasn’t the financial backing required for the whole operation."
I don't know if the article is good for EDI or not. The title doesn't suggest so, but then the quote above does.
It spells out that duo were unlucky to go, and I feel it is a shame that they are gone and didn't even make it to summer.
Loads at EDI were improving nicely each month on all their routes, but obviously not fast anough!
A well established airline will make easy money out if duo's routes from EDI.
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Very sorry to hear about Duo. Hope all the staff find jobs ASAP.
As to the situation in the low cost market at the moment all I can say is there are no new stories here. Too many players and a public hunger for lower fares. The result airlines running on ever-tighter margins. The real loosers here apart from the staff will be the public.
Once the war ends fares will rise as the competition falls over. In the mean time more and more passengers will loose money and find themselves stranded as so called low cost operators go bust.
Interesting watching the BBC on Sunday morning pointing to the lack of ATOL bonding for low cost airlines. What they failed to mention is no schedule carrier has any protection for the travelling public; it is a risk you take when you book! The package holiday may be becoming unfashionable but it was always a safe option, as you will always get your money back if the worst happens and you will always be brought home. In short you may not be saving money with DIY packages, you may in fact end up spending a small fortune.
But in defence of low cost operators you have no more protection from cancelled flights or failure of the company booking with any of the major carriers.
As to the situation in the low cost market at the moment all I can say is there are no new stories here. Too many players and a public hunger for lower fares. The result airlines running on ever-tighter margins. The real loosers here apart from the staff will be the public.
Once the war ends fares will rise as the competition falls over. In the mean time more and more passengers will loose money and find themselves stranded as so called low cost operators go bust.
Interesting watching the BBC on Sunday morning pointing to the lack of ATOL bonding for low cost airlines. What they failed to mention is no schedule carrier has any protection for the travelling public; it is a risk you take when you book! The package holiday may be becoming unfashionable but it was always a safe option, as you will always get your money back if the worst happens and you will always be brought home. In short you may not be saving money with DIY packages, you may in fact end up spending a small fortune.
But in defence of low cost operators you have no more protection from cancelled flights or failure of the company booking with any of the major carriers.
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Fury at £1.4m for Duo airline bosses Jul 8 2004
By Jon Griffin, Evening Mail
Six directors of collapsed Birmingham airline Duo are sitting on a potential nest egg worth nearly £1.4 million - while more than 300 former staff received just hundreds of pounds in compensation.
Meanwhile 500 trade creditors owed around £14 million will receive just 2.5p in the pound.
The financial revelations came today as a creditors meeting was being held in Solihull to examine the collapse of Duo over two months ago, with debts of more than £40 million and only aircraft spares as assets.
A total of 340 staff were laid off while administrators estimate a shortfall of many millions of pounds facing creditors.
Figures revealed in today's creditors report show that six directors hold 892,857 shares worth, at April 30, 2004, £1,390,472.
The report said that all creditors of the group director company, Duo Group, will be repaid.
But Mr Dawson stressed that the payments to directors may be challenged by the creditors.
Meanwhile former chief executive Peter Spencer holds a total of 267,857 shares, valued at more than £400,000.
The financial revelations were set to spark an outcry at today's creditors meeting where the true extent of the financial collapse of Duo was being revealed.
Bill Dawson, administrator with Deloitte, said the directors' shareholdings were almost certainly set to be challenged by creditors.
"There are a number of areas we have to establish whether these transactions are valid or invalid. This is not something which will happen automatically without a challenge," he said.
But Adrian Kibbler, former head of communications, who is owed more than £7,000 by Duo, said: "Staff and creditors will be shocked by these revelations. "It will be an outrage if they receive next to nothing whilst the directors walk away clutching small fortunes."
Administrators have also received 1,500 potential claims from passengers whilst the vast majority of the 52,000 customers owed an average of £100 each are likely to seek redress from their credit card companies via insurance.
Mr Dawson could not explain why, although all staff had been promised shareholdings, no share options had ever been issued to employees.
By Jon Griffin, Evening Mail
Six directors of collapsed Birmingham airline Duo are sitting on a potential nest egg worth nearly £1.4 million - while more than 300 former staff received just hundreds of pounds in compensation.
Meanwhile 500 trade creditors owed around £14 million will receive just 2.5p in the pound.
The financial revelations came today as a creditors meeting was being held in Solihull to examine the collapse of Duo over two months ago, with debts of more than £40 million and only aircraft spares as assets.
A total of 340 staff were laid off while administrators estimate a shortfall of many millions of pounds facing creditors.
Figures revealed in today's creditors report show that six directors hold 892,857 shares worth, at April 30, 2004, £1,390,472.
The report said that all creditors of the group director company, Duo Group, will be repaid.
But Mr Dawson stressed that the payments to directors may be challenged by the creditors.
Meanwhile former chief executive Peter Spencer holds a total of 267,857 shares, valued at more than £400,000.
The financial revelations were set to spark an outcry at today's creditors meeting where the true extent of the financial collapse of Duo was being revealed.
Bill Dawson, administrator with Deloitte, said the directors' shareholdings were almost certainly set to be challenged by creditors.
"There are a number of areas we have to establish whether these transactions are valid or invalid. This is not something which will happen automatically without a challenge," he said.
But Adrian Kibbler, former head of communications, who is owed more than £7,000 by Duo, said: "Staff and creditors will be shocked by these revelations. "It will be an outrage if they receive next to nothing whilst the directors walk away clutching small fortunes."
Administrators have also received 1,500 potential claims from passengers whilst the vast majority of the 52,000 customers owed an average of £100 each are likely to seek redress from their credit card companies via insurance.
Mr Dawson could not explain why, although all staff had been promised shareholdings, no share options had ever been issued to employees.
