Romanian budget carrier Blue Air has extended its suspension of operations for another month following its decision to stop all flights earlier this week. The airline's finances were frozen after it failed to pay fines imposed by Romanian authorities. We take a closer look at this story below.
Blue Air flight suspension to continue
Blue Air will cease all operations until at least October 10th after revealing it cannot pay its operational costs. The airline had initially suspended flights until September 12th but will now extend this by another month.
Blue Air said,
"In the last 48 hours, the executive management, the Board of Directors and the shareholders of Blue Air found that the level of ticket sales was significantly affected, and the amounts that were collected by payment processors were blocked by them, so that the Company does not have at this time of the funds necessary to pay for the fuel and other operational expenses, necessary for the flights planned from September 12."
The carrier revealed that, despite its ongoing dispute with Romanian authorities, "representatives of the Ministry of Transport and Infrastructure requested the resumption of flights as soon as possible."
As Simple Flying explored earlier this week, Wizz Air stepped into the gap left by Blue Air's suspension of services, even going so far as to offer rescue fares for Blue Air passengers amid a broader Romanian expansion.
No service until debts are repaid
The airline claims it will not be able to work with providers of essential flight services, including "airports, handling companies, fuel suppliers, traffic control authorities and owners of Blue Air planes," until it resolves its outstanding debt.
Additionally, it will need to reimburse passengers who had purchased fares on affected services before it can resume operations on October 10th. Should this fail to happen, expect the airline to extend its suspension again.
Blue Air added,
"The decision to resume flights decisively takes into account the possibility of the company to reimburse all affected passengers the amounts owed and to pay all commercial partners the costs of the services provided in favor of the company."
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Will this resolve itself?
The origin of this dispute lies in Blue Air's cancelation of over 11,000 flights between April 2021 and April 2022, leading Romania's National Authority for Consumer Protection (ANPC) to dish out a €2 million ($2 million) fine.
Blue Air was already in dire financial straits before this fine and actually owes a lot more than just the €2 million. Along with the fine, the ANPC ordered Blue Air to repay its customers around €13 million ($13.05 million), with a total of 178,405 reservations affected.
Additionally, the airline owes unpaid CO2 credits to Romania's Environmental Fund Agency (AFM) to the tune of over $5.7 million. According to the airline, it incurred upwards of €130 million ($130.50 million) losses during the pandemic and is in active discussions with potential investors.
Do you think Blue Air will overcome this and resume operations next month? Let us know your insights in the comments.