BANGKOK, 21 August 2020: Despite a history that traces back to a company founded by two Australian backpackers in 1979, STA Travel in Switzerland filed for insolvency on Wednesday a move that could ultimately impact on more than 200 offices worldwide.
Parent company STA Travel Holding AG said in a statement: “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 statement confirmed that “STA Travel Holding AG is filing for insolvency in the next few days. An external administrator will take over and determine next steps.”
It noted that “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.”
While the parent company STA Travel Holding AG in Switzerland is affected, local day-to-day operations by STA Travel may continue in 200 offices worldwide that make up the group’s network. Many of them are joint ventures or franchises which would allow them to continue trading locally. Reliable sources said the franchise fee was around EUR3,000 per location.
Travel executives told TTR Weekly they were shocked by the news claiming STA Travel performed well financially up until this year. Australia and New Zealand were top supply markets for STA Travel, mainly driving bookings for students, gap year and budget travellers heading for Europe and the UK. Other offices, such as Singapore and Thailand, reported strong sales. STA Travel is also an authorised IATA agent.
However, due to the global impact from the Covid-19 pandemic STA Travel offices in Asia reduced services or closed making staff redundant or asking them to work from home. STA Travel Thailand confirmed it has only one office location in Bangkok … ” but we still operate via online channels.” The STA Travel network worldwide employs around 2,000 staff.
Launched as Student Travel Australia in the 1970s and later renamed Student Travel Association, it rebranded under Diethelm & Keller ownership in 2009 to ‘Start the Adventure Travel’.
STA Travel faced major setbacks in 2020. In April, the company was hit with AUD14 million in penalties over misleading adverts about its multiflex pass product. The complaint was filed by the Australian Competition and Consumer Commission.
In May, STA Travel faced a potential class-action case over voucher schemes that “significantly disadvantage customers” who suffered from trip cancellations as a result of Covid-19.
The travel company belongs to Diethelm Keller Holdings headquartered in Switzerland that owns five travel units; STA Travel, Diethelm Travel, Globetrotter (50%), Explorer Fernreisen and Travellers Autobarn.
In Switzerland, STA Travel (formerly SSR Reisen) operates eight travel agencies in German-speaking Switzerland and five branches in French-speaking Switzerland, according to the Swiss travel portal About Travel.
STA Travel Group is led by CEO Ivan Walter who joined the company in April 2019 replacing Reinhard Kotzaurek. Walter worked for Kuoni for 12 years and was CEO of GTA Travel from 2013 to 2018.
(Source: STA Travel Holding AG statement)
Yes this is absolutely crazy this company has been sitting on checks that United Airlines refunded to them 2 months ago and they have yet to credit my credit card. I followed up regularly with calls, emails, always excuses. I will definitely file a lawsuit if I do not get credited to my card.