What Happened To UK Carrier Air Europe?

Established in 1978, Air Europe was a privately owned United Kingdom airline that focused on short-haul charter flights to holiday destinations in Europe like Spain, Portugal, Greece, and Italy. First using the title Inter European Airways, it adopted the Air Europe name in 1979. The idea to get into the holiday charter business was the brainchild of two former Dan-Air executives Errol Cossey and Martin O’Regan. The two, along with Intasun Leisure founder Harry Goodman saw a gap in the European leisure travel market and decided to create a new airline.

Air Europe Boeing 737-200
Air Europe started with three Boeing 737-200s. Photo: Rob Hodgkins via Wikipedia

After a slowdown in leisure travel during the oil crisis in the early 1970s, a revival occurred towards the end of the decade thanks to Freddy Laker and his no-frills Skytrain. Laker decided to curtail its European flights in favor of low-cost flights to America, and British Caledonian’s decision to pull out of the holiday travel business presented a unique opportunity for Air Europe.

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Air Europe offered meals on its flights

The plan was to secure the use of new aircraft and to provide catering and service equal to what scheduled airlines offered their passengers. This was an entirely new concept as up until then, UK holiday charter flights were cheap as chips affairs with older aircraft and hardly any catering.

Air Europe knew that because of the seasonality connected with the charter holiday business, they would have to sell out the flights between the peak June-September summer season. Don’t forget back in the 1970s, the British didn’t know how to ski, so winter charter holidays did not start to appear until much later.

Air Europe started with Three Boeing 737-200s

Learning that three Boeing 737-200s would be available after the airline that ordered them canceled, Air Europe went looking for financial backers to help them secure the planes. UK financiers were not enamored with start-up airlines. They would not provide any funding unless they enjoyed the backing of a wealthy organization, which kind of negates why they needed to borrow money in the first place. With UK institutions not willing to help, Air Europe was forced to look abroad for money.

Air Europe Boeing 737-200
Air Europe’s first flight was to Mallorca, Spain. Photo: Andrew Thomas via Wikipedia

Thanks to Japan’s huge trade imbalance with the United States and Japanese companies’ willingness to buy American aircraft and lease them out to non-US airlines, Air Europe found a backer for its planes. With its headquarters near Crawley in West Sussex, Air Europe made London Gatwick Airport (LGW) its main operating base. The airline’s first commercial flight was on 4 May 1979 when a 130 seat Boeing 737-200 departed Gatwick Airport bound for the holiday island of Mallorca.

Air Europe was once Gatwick’s biggest airline

Unlike other charter airlines, Air Europe turned a profit in its first year of operations and began expanding into regularly scheduled short-haul flights in Europe. Towards the end of the 1980s, it had become Gatwick Airport’s biggest airline.

Air Europe 757
Air Europe overextended itself with too much debt. Photo: Altair78 via Wikipedia

However, this success proved to be short-lived thanks to increased borrowing costs and a lack of tangible assets. In the lead up to the Gulf War of 1990 and a Britain struggling with a recession, the number of people flying deteriorated. In the end, Air Europe’s quick expansion and high-risk strategy failed, leaving the airline financially overextended without any significant assets as its debts continued to mount up.

Air Europe declared bankruptcy on  March 8, 1991, ending a wild ride for one of the UK’s most popular airlines.

Did you ever fly with Air Europe? If so, we would love to hear what they were like in the comments.