2019 has been a tough year for many airlines. At least 18 airlines went bankrupt over the year, including some big names such as Thomas Cook, Jet Airways, Flybmi and Avianca Brasil. This article gives a quick recap of some of these.
Gone under in 2019
As of November 2019, there were at least 18 airline bankruptcies reported (according to skycop.com) for the year. These were:
- Adria Airways (Slovenia)
- Air Philip (South Korea)
- Aerolineas de Antioquia (Colombia)
- Aigle Azur (France)
- Al Naser Wings Airline (Iraq)
- Asian Express Airline (Tajikistan)
- Avianca Argentina (Argentina)
- Avianca Brazil (Brazil)
- California Pacific Airlines (USA)
- Fly Jamaica Airways (Jamaica)
- Flybmi (UK)
- Germania (Germany)
- Insel Air (Curacao)
- Jet Airways (India)
- Thomas Cook Airlines (UK)
- Wisdom Airways (Thailand)
- WOW Air (Iceland)
- XL Airways (France)
According to reporting by Reuters, airline bankruptcies have increased at the fastest ever rate in 2019. They cite reasons including weaker airlines being unable to compete against low-cost models, higher fuel costs and a strong dollar.
Many of the airlines on the list are small. These include single aircraft airlines such as Fly Jamaica Airways and Al Naser Wings, as well as local operators such as Wisdom Airways which operated a small fleet from Chiang Mai in Thailand.
We take a further look here at some of the larger bankruptcy cases, and what went wrong with these airlines.
Certainly very much in the memory of many in the UK, Thomas Cook went bankrupt on September 23rd after it failed to secure £200 million of funding. Whilst it had been in financial difficulty for some time, it’s collapse was no less damaging.
The airline left more than 600,000 passengers stranded around the world. This prompted the UK’s largest-ever peacetime repatriation operation. It also brought to an end the 178-year history of the famous UK tour operator.
On April 17th, Jet Airways announced it was ceasing operations. It had been struggling for some time, and had already started grounded flights earlier in the year. The final straw was the refusal of emergency funds from the State Bank of India to keep operating. Jet Airways was once the largest airline in India, operating a fleet of 120 aircraft.
WOW Air was an Iceland based low-cost carrier. It originally offered low-cost European flights but expanded quickly to the US, attempting similar low fares through aggressive promotions. It was in financial difficulty from mid-2018 but finally faced bankruptcy on March 28th 2019. This followed two failed acquisitions by Icelandair and investment firm Indigo Partners.
In November 2019, plans were announced to re-launch as ‘PLAY’. This airline would again start with European operations, but with plans to soon investigate US routes. At Simple Flying, we looked recently at this, as well as the bigger questions of whether bankrupt carriers should relaunch.
Slovenian airline Adria Airways announced bankruptcy on September 30th. Its difficulties had been long-lasting – it had not been in profit since 2014.
As the flag carrier of Slovenia, founded in 1961, this was obviously of great significance to Slovenia and greatly reduced flight operations at the main airport, Ljubljana. Soon after, the Lufthansa Group moved in to replace many of the routes. SWISS has even replaced one route with a train service.
Aigle Azur was the second-largest airline in France and went bankrupt on September 27th. It had previously rejected a number of takeover bids – there had been strong interest in their slots at Paris Charles de Gaulle.
This was another airline with a long history. Aigle Azur was formed in Paris in 1946.
Several months before Thomas Cook’s problems, in February 2019, the smaller UK airline Flybmi faced bankruptcy. Flybmi operated UK domestic and European flights. It blamed a number of issues – including rising fuel prices (and the EU’s decision to exclude UK airlines from full participation in the Emissions Trading Scheme) and the uncertainty around the Brexit process in the UK.
Avianca Brazil and Avianca Argentina
Both of these airlines, separate entities operating under the Avianca brand, went bankrupt in June 2019. Avianca Brazil was the fourth-largest airline in Brazil (both domestic and international) at the time of bankruptcy.
Avianca Argentina was a much smaller operation based in Buenos Aires. It was formed only in 2017 when Avianca acquired Macair Jet, operating just domestic flights in Argentina.
Naturally, it is hard to predict what 2020 will bring for any airline. But many of the difficulties in the industry remain. On the positive side, stronger airlines are benefiting from increased traffic, available slots and more aircraft on the market. We have already seen this many times. For example with the slots of Monarch airlines (which went bankrupt in 2017) and more recently Ryanair looking to acquire part of Thomas Cook’s fleet.