MercoPress. South Atlantic News Agency

Flyglobespan MOD charter to Falklands faces £ 4 million redundancies claim

The Edinburgh-based budget airline in 2008 won a four year contract with UK MOD

Flyglobespan, the airline that had a contract with the UK Ministry of Defence to cover the twice weekly shuttle to the Falkland Islands and collapsed a year ago, is facing a £4 million claim from former staff over its failure to consult on redundancies.

According to the British press the Edinburgh-based budget airline went into administration just before Christmas last year, leaving thousands of passengers - and its own cabin crew - stranded abroad.

Around 650 people lost their jobs as the company collapsed, and now 500 cabin crew staff have launched an employment tribunal case, claiming they are all due 90 days' pay as they were not given proper notice of their redundancy.

They say staff was axed just a week before Christmas without any pay or notice, with many finding out they had lost their jobs from news reports.

“Dozens of cabin crew staff had to make their own way back from far-flung destinations, such as the Falkland Islands and Saudi Arabia”.

They have now taken action, with legal help from the Unite Union, and a preliminary hearing is scheduled to be heard in the Capital in February.

Fiona Farmer, Unite's regional officer responsible for Flyglobespan, said: “The majority of the claims are from Unite members. It has taken a long time to get through.

”They had (proceeds from] the sale of the aircraft and property that was owned by Globespan. We are still fighting on behalf of the cabin crew and these are claims that are to be lodged and hopefully the money they are due will be secured.

“Many of them were kicked out of hotels they were staying in and relied on the goodwill of other airlines to get home and had to rely on their own credit cards”.

In March, it emerged that some 40,000 Flyglobespan creditors - mostly passengers who paid for flights that never left the ground - had made claims against the company totalling around £40m.

PricewaterhouseCoopers (PwC), who is handling the administration of Flyglobespan, said in a progress report that the latest claims against the company and its subsidiaries resulted from it “failing to consult prior to announcing redundancies” on December 17, 2009. It also highlighted the potential cost of the claim, but added there was a “valid defence” for the action.

It said: “If successful it will result in an unsecured claim of £3.9 million against the estates. The company and its subsidiaries are of the opinion that there is a valid defence to these claims; as a result its legal agent has been instructed to lodge defence with the employment tribunal.”

The cause of Flyglobespan's collapse was a cash-flow crisis in its final six months caused by delays in receiving payments from the online firm E-Clear, and PwC admitted the £34m still owed by E-Clear was now the company's biggest asset.

It was unclear what return they can expect, however, with administrators for E-Clear still trying to sort out the company's finances, with creditor claims totalling more than £80m.