STA Travel files for insolvency

Melbourne, Australia: April 10, 2018: Street view of a Sta Travel Agency shop on Acland Street in St Kilda. STA caters mainly for students and young adults.

The global pandemic has signalled the end for another travel company, with STA Travel unable to pay its bills.

The youth travel advisor has filed for insolvency, advising in a statement that an external administrator will be taking over in the next few days to determine the next steps.

While the parent company STA Travel Holding AG in Switzerland is affected, the company advised local day-to-day operations by STA Travel may continue around the world.

“The global magnitude of the pandemic crisis has brought the travel industry to a standstill, including STA Travel, a student and youth travel company,” the company said.

“Over recent months, the company took decisive measures to secure the business beyond COVID-19.

“However, sales have not picked up as anticipated, due to consumer uncertainties, further restrictions and renewed lock-down measures, which are expected to largely continue into 2021.

“STA Travel Holding AG very much regrets to not have been able to secure the future of the business under these unprecedented circumstances.”

In may, STA Travel was named in a potential class action over voucher schemes that “significantly disadvantage customers” who suffered from trip cancellations as a result of COVID-19.

In April, the company was also hit with $14 million in penalties over misleading ads about its multiflex pass product.

STA Travel is not the first company to collapse under the pressure of the global pandemic.

Virgin Australia entered voluntary administration in April, but is expected to be bought by Bain Capital, with the second creditors meeting scheduled for 4 September.

Cruise and Maritime Voyages and Air Mauritius have also entered into administration.


Featured image source: iStock/jax10289

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