Airline failures may not be the most cheery of topics; however, looking back at past mistakes does pave the way for the future. Remember all the airlines that didn’t make it through the decade? Here’s a look back at 10 of the airlines that collapsed between 2010 and 2020.
2010: Mexicana de Aviación
The turn of the decade did not bring fortune to Mexicana de Aviación, more often known as Mexicana. Founded on July 12th, 1921, it was the oldest and largest airline in Mexico and also claimed the title of being the flagship carrier. With three hubs in Mexico City, Cancun, and Guadalajara, Mexicana enjoyed a highly autonomous history until it became nationalized.
In 1982, the Mexican government purchased a 54% stake in the company, but during the Tequila Crisis of 1995 – a sizeable economic depression – the Mexican government sought 100% ownership.
That remained until 2005. Mexicana was then sold to Group Posadas and Gastón Azcárraga, who acquired the airline $234.5m under its true valuation. The mismanagement of the airline under the new ownership ultimately led to Mexicana’s demise on August 28th, 2010.
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2012: Malev Hungarian Airlines
Malev Hungarian Airlines was the national flag carrier for Hungary and existed for 66 years between 1946 and 2012. It first began operations in 1954 with a fleet of Soviet-era aircraft.
The airline left state ownership in 2007 when it was acquired by Russian consortium Airbridge. It was during this period that the airline also began receiving state aid. At the time, Airbridge owned a 99.9% stake in Malev and continued until 2009. It remained a majority stakeholder in the airline however offered a 49% share to a Russian state-owned development corporation called Vneshekonombank in 2009.
In 2010, the airline was renationalized, and Airbridge decided to keep a 5% stake. However, the damage had already been done. Under EU law, it was found that Malev had illegally received state aid between 2007 and 2010. It was ordered to pay back the amount; however, the decision to do so was not sustainable.
Damaged by financial woes, the airline ceased operations on February 3rd, 2012, and was declared insolvent 11 days later.
2017: Air Berlin
Another large airline to go in the past decade was Air Berlin. In 2017, the German airline met its fate after years of accruing losses.
Founded in 1978, the airline was first introduced as Air Berlin USA. It had a unique position in that it was an American airline and had access to both the eastern and western portions of Berlin during the Cold War. It predominantly provided charter flights for German operators to destinations in the Mediterranean.
After the Cold War, the airline was restructured and became known as a quasi-low cost airline which offered complimentary meals. However, between 2006 and 2016, it continually made losses in operating profit, failing to keep up with its costs. Despite multiple attempts to claw back cash, the airline ultimately met its demise on October 27th, 2017, with $867.8m in debt.
2017: Monarch Airlines
Monarch had been operating for 49 years before it ceased operations. Its downfall came from its strategy. It became comfortable with family-orientated package holidays, which were a popular market during the 70s.
However, as customer ideals changed, so too did Monarch. It moved to a strategy that facilitated independent travel plans at low prices. The nature of its model, along with soaring fuel prices and a wave of anxiety caused by recent terror attacks in popular Monarch holiday destinations, left it reeling. Despite a $164m investment, Monarch collapsed on October 2nd, 2017.
2018: Primera Air
Low-cost Danish-Latvian airline Primera Air was founded back in 2003 as JetX. It began charter flights as part of holiday operator packages but soon moved to a more sustainable flight-only package. It expanded its route network across Europe and eventually went Transatlantic with its offering and also branched out into Dubai in 2014.
However, shortly after that, profits began to drop, and in 2015, the carrier posted a $26m loss. It continued to expand in the hope that it could claw back profit, which it did in 2017. However, it was not for long.
The airline continued on a loss-making trajectory, and despite having big expansion plans, it says it was hampered by the late delivery of six Airbus A321neo that it had hoped to use between the UK and France to New York.
Also, the airline did not secure the funding it needed for its survival, and on October 2nd, 2018 declared itself bankrupt.
2019: Wow Air
Icelandic low-cost carrier Wow Air declared itself bankrupt on March 28th, 2019. Though it may have seemed like a reasonably robust airline, the carrier ultimately struggled with rising fuel prices. Operating at a low-cost, it was unable to manage a hike of more than 100% on its costing per gallon.
What’s more, it was also flying multiple aircraft; Airbus A319, A320, A321 and A330, and vying for competition on Transatlantic routes. The culmination of these factors ultimately led Wow Air down a costly path. Eight years after it was founded, the airline collapsed, leaving holidaymakers stranded and eventually surrendering its fleet.
2019: Jet Airways
From its inception, Jet Airways grew to become the second-largest airline in India with routes to both domestic and international destinations. With such a good precedent, where did it all go wrong?
Jet Airways became a scheduled airline back in 1995 and, after that, was predominantly a domestic carrier. In the 2000s, it served only two international destinations but 40 routes within India. When it did begin to branch out into the global markets, it had success. However, the rise of the low-cost carrier saw it struggle.
The airline simply could not keep up with the competition and accrued losses. It began selling its widebody fleet, and its demise seemed obvious. However, no one stepped in to save the carrier. After failing to secure a healthy investment, the airline ceased all operations indefinitely on April 17th, 2019.
2019: Thomas Cook
Like Monarch, Thomas Cook was in the business of package-holidays. Only, unlike Monarch, it did not adapt when needed. Very much in love with its travel agent model, it allowed itself to be poached by companies that helped travelers secure independent travel.
As its travel agency customers decline, so too did interest in the Thomas Cook airline as the competition took over. Had Thomas Cook owned any of its assets, then it would have been able to bounce back a little from financial difficulty. However, leasing aircraft came at a risk to its operation. When it needed to raise money, it didn’t have the means which left the airline struggling.
After announcing in 2019 that it had lost $1.5bn, the banks suggested investment of $200m would keep it afloat. However, that money never arrived. It entered compulsory liquidation on September 23rd, 2019, leaving 600,000 people stranded.
2020: Air Italy
The Air Italy bankruptcy is still somewhat fresh in our minds. After becoming Italy’s second-largest carrier, behind Alitalia, the airline ran into financial difficulty in 2017 after announcing losses.
It had been owned 49% by Qatar Airways however was hindered by the fact that it needed a majority EU stakeholder. Despite Qatar insisting it wanted to invest more into Air Italy, majority stakeholder Aga Khan decided to pull the plug on the airline. He cited high competition, the 737 MAX grounding, and, ultimately, the coronavirus for damaging Air Italy’s survival potential.
The airline went into liquidation on February 11th, 2020.
Flybe, like Air Italy, was another airline that saw its collapse come sooner than anticipated with the coronavirus. From 1979 when it began operations until 2010, Flybe was a profitable airline. It picked up new routes and took advantage of low fuel prices before the turn of the century.
However, when it was placed on the stock market, its fortunes changed. At that time, in 2010, it placed a large order with Embraer to the tune of $1.3bn. However, this investment in 35 E175s was a downgrade in the aircraft efficiency the airline had had with its Dash Q400s.
As a low-cost airline, it was also hit by increasing fuel prices, and when the UK decided to leave the EU, it devalued the pound, which was a problem since the airline paid in dollars but earned in GBP.
With a travel demand slump caused by the coronavirus, the years of financial deficit caught up with Flybe. It entered administration on March 5th, 2020.
What do you make of these collapses? Let us know your thoughts on this story in the comments.