The many casualties of European airline industry
October has certainly not been a kind month for European aviation in the past few years. As it happens, neither legacy airlines nor low-costs seem safe from failure. Nordic budget carrier Primera Air failed on the one-year anniversary of the collapse of British holiday airline Monarch, which occurred on October 2, 2017. Just recently, on October 17, 2018, Cyprus-based low-cost carrier Cobalt Air announced its closure. And now, Air Belgium might be considering shutting down as well.
Cobalt ceased operations after only two years of flying. It had entered the short-haul market by taking advantage of the vacuum left by the failure of the national carrier Cyprus Airways. The Denmark-based ultra-low-cost Primera, on the other hand, had been flying for 14 years before it ceased operations. The two budget carriers both flew a fraction of Monarch’s passengers following its demise.
After almost 50 years in operation and numerous injections of cash, Monarch Airlines was finally forced to hang up its hat and enter into administration. The airline had a long association with holiday and charter service before re-positioning itself as a purely scheduled carrier. Speaking of British aviation, this month, on October 12, 2018, saw a home-based ACMI/VIP charter airline Cello Aviation terminate its activities.
But the one collapse aside of Monarch (and very much similar in circumstances to it) that sent shockwaves through the European industry was Italy’s loss-making national carrier Alitalia, which was forced into administration in May 2017. For now, the airline is being kept afloat thanks to the Italian government as well as a $1 billion (€900 million) loan from the European Union. But as the October 31, 2018, deadline to find a buyer for the airline approaches, Alitalia’s future remains unknown.
In October last year, it was Air Berlin (AB1) , Germany second-largest carrier that stopped its activities for good, having filed for bankruptcy in August 2017. Like Monarch, it had been struggling for quite some time (around a decade, in fact) and faced many financial losses. Air Berlin’s (AB1) main shareholder and part-owner Etihad Airways is what allowed it to stick around for such a long while. After the carrier’s fall, Germany’s national carrier Lufthansa (LHAB) (LHA) purchased 81 of its aircraft and employed more than 3,000 of Air Berlin’s (AB1) former employees.
As for what you just read about Air Belgium, the airline might be heading down the same lane as well. Founded in 2016, the Brussel-Charleroi airport (CRL) based carrier immediately ran into difficulties and did not start operations until this year. The startup had been serving only one destination, Hong Kong, until it suspended those scheduled flights in September 2018. When news emerged a general meeting by the company’s executives would be held October 18, 2018, there was speculation it may be considering shutting down. But it seems Air Belgium’s board decided to continue focusing its efforts on wet-leasing, hoping the several ACMI contracts will keep the carrier airborne while it seeks a new Chinese partner.
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