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I reckon most businesses in Scotland would fold if £20M in cash receipts due for products already supplied was being "held back". That sounds suspiciously like the banks killing a business to get first bite at the corpse.

I'm not a banker but I would like to respond to post 1.

Its easy to have a go at the banks at this time but on this ocassion they don't seem to be at fault.

Any financial transaction undertaken by debit or credit card has an amount deducted from the total that the company receiving the amount would receive. Most companies in the UK use their own bank for this who do very nicely out of it thank you very much.

The really big companies such as Tesco and M&S do it themselves via their own financial services arms. You used to see on receipts at M&S a statement at the bottom of receipts at M&S that said something to the tune of

"2.75% of the payment made has been passed to Marks & Spencers Financial Services Ltd for processing this payment"

Small businesses get charged by banks for paying in cheques and making cash payments as well so automated payment via debit or credit card suited everyone. After all you wouldn't necessarily want to walk down the High Street with a lot of cash and then have to queue up to pay it in during the working day whilst shutting up for business.

I don't own a small retailer so can't tell you how much they are charged but I imagine that for FlyGlobespan the banks either weren't interested in processing for Globespan or wanted such a large cut that E-Clear became a cost effective alternative.

After all in the dog eat dog world of low cost airlines a small percentage on admin coulf be the difference between profit or loss and success or failure.

In the earlier post someone aluded to E-Clear having changed their terms in June this year I imagine this was the straw that broke the camels back.

I don't know for certain but I'm just putting 2 and 2 together and making 5.

If I was a conspiracy theory supporter I might be thinking that this is yet another Scottish company being wrecked by the London based Unionist mafia. How can E-Clear justify the non-payment of £20M? These questions need to be asked.

Having only had one experience with Fly Global Span - I can confirm they are a dreadful airline and an awful company to do business with. I am not surprised they have gone out of business. I am surprised that they managed to stay in business so long.

"How can E-Clear justify the non-payment of £20M"

A question an awful lot of out o'pocket people would like to know. Is it true that the MD of Eclear- Elias Elia was also a member of Halcyon Investments the investment company interested in Globespan. Not only this but is there any way the named above can be linked to XL, Zoom and Sunwing (interested investors until last minute) at all...

Love to know the answer to the above, think we'll ever find out? Maybe not.

firstly i would like to offer my condolences to allthe staff at globespan.do you not think that it would be a good business for some person to take on as it seems it can now make a profit,and by all accounts good staff already in place.just a wee thought since it seems a shame to loss what i think is the best way to travel civilised air travel,have now booked my jan trip to tenerife with a rival but not now looking forward to the flifht

No business can have a credit card company retaining money of this size especially one that depends on cash flow, and does beg the question about what Globespan was doing not only to resolve the non-payment but also why did it continue to use e Clear when funds were not being processed. e Clear and Halcyon are clearly linked, but does the spiders web extend further ? Clearly a dreadful day for all concerned, but there is a lot more on this story to run it would appear...............

I have run a quick check on Eclear and as far as I can see then they are controlled from Cyprus. Accounts for last year have not been filed, they are overdue at Companies House. They bank with RBS and it would also be interesting to know who Globespan's bank is?. It would be very sad, but possible, that the travelling public is helping a bank to recover debt.

If what you say is true then Globespan was a viable business, a viable Scottish business. I wonder if Mr. Salmond had access to the funds that Mr. Brown has, would he have sent some the way of Globespan to tide them over their cash flow crisis?

Maybe that is the reason that Iain Gray, the Labour leader in the Scottish Parilament chose not to raise this issue at First Minister questions, instead concentrating on a trivial matter. (See Brian Taylor' blog).

If E-clear didn't give Flyglobespan the money people have been paying for tickets then surely E-Clear can just return that money? Or are the administrators going to force E-clear to hand over the cash to them?

This comment was removed because the moderators found it broke the house rules. Explain.

#9 alan_addison

Salmond would be walking right into a "european competition" salvo from all ends.

The Italian Government is still secretly propping up Alitalia and an awful lot of focus is being made on what some see as governments "unfairly" protecting thier national airlines.

This story does have a few questions to it. I'd like to hear a bit more about this £20M before I make any assumptions about E-Clear. If this does prove to be a scandal - the clues won't be far under the surface once you start scratching.

Interesting...



The indepednent broke this story in November - almost a fore-runner to whats happened...

Definitely more to this than meets they eye...

Like most people I have booked with Globespan for 2010. First of all let me say my sincere condolences for those employees who have lost their jobs. Secondly what were Globespan doing taking bookings and money from customers 2 days before they went in to Administration? Surely this is illegal and the company should be taken to task for their appalling illegal business practices and the Directors charged for their part in this fiasco. I would also like to know what the First Minister is going to do about it and instead of swanning off to the Climate Conference in Copenhagen which was totally unnecessary he should have been at home calling a meeting to see what can be done about this disgraceful scenario.

I hope this is fully investigated. There seem to have been links between all the recently failed airlines and E-Clear. E-Clear also appear to have been the credit card handling company for Zoom, XL and SkyEurope. SkyEurope have alleged that E-Clear owed them a significant amount of money.

Douglas, have you checked you facts? If not will you retract your comments about eClear?

EClear is a payments processort and has no means of holding onto the cash which will be held on deposit by someone like RBS.

What are the real facts or do you just repeat what you have been told by the lobby.

Shame on you if youdo.

Bit of Scottish paranoia creeping in here.I just hope Swinney has actually had clear guidance on this issue with regard to EClear. Have you ever wondered why it can be so expensive to use a credit card rather than debit card to pay for travel bookings? Well all down to rik management really. EClear is not a credit card company, but instead is a transaction processor for the credit card companies. However these processors carry the entire financial risk of credit card bookings should a company such as this particular airline go into some form of default. The reality is that no conventional transaction processor will touch financially vulnerable businessses such as budget airlines and instead they deal with "alternative" processors such as EClear. I am concerned that Mr Stevenson has had meetings with them in recent months and would expect that opposition politicians will seek clarity as to the purpose of such meetings. It has also been the subject of concern in the airline industry that Globespan was a major benficiary of highly lucrative MOD contracts last winter which in reality probably extended the life of the business for another year. EClear seem to be the only participant who correctly understood the doomed nature of this house of cards.

Surely the Scottish Executive could have helped out in the short term until the funds were released? But no, Alex Salmond was too busy showing off in Copenhagen.

#12. You don't have to be a lawyer to justify how such a 'prop-up' would be done. Salmond would simply 'loan' or 'underwrite' £20M in credit until the £20M was recovered from E-clear. Thats quite different from the Italians just subsidising Alitalia (the Greeks did the same with Olympus... another ghastly airline BTW)

Generally I've heard nothing good about Globespan and certainly wouldn't have flown them out of choice but this withholding cash business stinks. Anyone could be put out of a job by the same trick.

Peter Sym - Flyglobespan was a godsend to many people who live between two countries. Edinburgh-Barcelona, 3 1/4 hours, reliable, good price, nice staff. Now the old horror of wasting the best part of a day to get back and forward. My grain of sand.

I agree with you that in comparison with Brown and the banks, the Scottish government may have too healthy a respect for competition law. Noone else does, certainly noone in Europe, and less still in a vital infrastructure. We can only assume that the company was in "free fall" by then.

As a casualty of the Globespan crash I was due to fly to Edinburgh today to spend Christmas with my family. Instead i will now face a flight late Sunday to England and then travel to Edinburgh. Apart from the expense and stress involved I am angry that other airlines appear to be cashing in on helping people get home. I was lucky as my family alerted me immediately it was announced and I went on line and booked a flight. This flight has now gone up by another £100!! Clearly a case of airlines making money in the Season of Goodwill to all Men!!! I have used Globespan for many years flying to Cyprus and I have only been delayed once and found them to be very efficient. Its a shame for all the dedicated staff to lose their jobs before Xmas. Lets hope the politicians will get round to ensuring we have a full explanation of this major event. Especially for Cyprus, they rely very very much on the Scots who use this budget service, at a time when they are really being effected by the recession.

There is a lot that has been said about cash owed to Globespan. No one has mentioned though that the company has lost at the end of its financial year on 31st October £10Million, and has piled up debts of £30Million.
The true reason why the company's licenses were revoked by the CAA (hence the filing) was that the CAA has been asking the company for a business plan to redress their financial situation and bring it in line with the CAA's financial viability requirements since June 09 and the management of the company were not able to produce such a plan.
You might also want to ask the underwriters community the reasons why they refuse since June 2008 to include the credit risk of Globespan within the credit policy. Rumour has it that the reason was the lack of clarity in the financial disclosures the management of Globespan made to the underwriters.
We haven't heard the last of this but one thing is for sure, the management of Globespan has a lot to answer for in what has happened.

Another company collapsed yesterday whom E Clear handle credit card transactions for also - Allbury Travel Group (formerly Libra Holidays) - source Travel Weekly.

Looks like E Clear owe all kinds of companies money and any company linked to them is now going to collapse also.

A full investigations must be made about this company

Mark Patterson - you have almost answered your own question in asking why underwriters did not want to cover Globespan - because they were linked to E Clear who was in problems for some considerable time having had many other airlines all that had collapsed over the years. E Clear appeared to be a last stop shop for badly performing airlines.

John Harris,

You seem to have missed what I have written. E-Clear have their cover which covers all their clients. Globespan were not added to the cover. We're talking credit worthiness here and Globespan lost their cover because apparently they were not totally clear (and that's putting it mildly) in disclosing their financials back in 2008 to the underwriters. Nothing to do with E-Clear here and all to do with Globespan and their "Honesty".

Of course many Airlines linked to E-Clear collapsed but that is more due to bad management operational decisions than anything else.

Before we point the finger let us find out all the facts.

What kind of businessman is Tom Dalrymple? What of his management team? How did they let this happen? Have they ever heard of Due Diligence? If they've been working on this deal for some months how come they didn't know what you've found out in a few days? Their silence is deafening.

Does a lack of business plan for the future answer your question? The CAA's patience was eroded over the past few months with the management being unable to come up with a business plan. That was the real trigger rather than anything else. You don't run an airline without a plan, and the management plan was simply not there to convince the CAA they should be allowed to continue trading.