Which Airlines Have Been Hit By Bankruptcy Since COVID Began?

It has now been nearly three months since the outbreak of the novel coronavirus brought global commercial aviation to a screeching halt. For some airlines, already struggling financially before the travel restrictions, the COVID-19 crisis has proven a monumental final straw.

Which Airlines Have Been Hit By Bankruptcy Since COVID Began?
Some airlines will remain on the ground post-COVID. Others will emerge, having undergone substantial restructuring. Photo: Getty Images

Who would have thought that such a minuscule organism could bring such a large industry to its knees? The unprecedented circumstances have sent faltering airlines to desperately seek investors and state-guaranteed bailout loans to survive.

They have negotiated with manufacturers to defer aircraft deliveries and payments, as well as with unions on protective equipment and job cuts. For some, even drastic cost-saving measures have proven to be not enough.

LATAM 767
LATAM is the largest carrier so far to file for bankruptcy protection. Photo: Getty Images

LATAM largest so far

Just yesterday, May 26th, South American giant LATAM became the last in a line of carriers, the largest so far, to file for emergency reorganization and bankruptcy protection under US Chapter 11.

LATAM, which was not in bad shape financially before the crisis, said it would continue to fly as conditions allow throughout the process.  But what other airlines have fallen victim to the greatest challenge in the history of commercial aviation?

Air Italy
Air Italy was one of the earliest victims of the crisis. Photo: Getty Images

Europe

Air Italy, the country’s second-largest airline, was one of the crisis’s earliest victims. Investors decided to place the struggling carrier into liquidation on February 11th, just shortly after the first coronavirus cases were confirmed in Italy. Although, it would seem its fate is yet to be sealed as it recently filed for US flight permission.

British regional airline Flybe entered into administration on March 5th. The already struggling airline failed after attempts at securing a £100 million ($123 million) rescue loan from the UK government fell through.

Another regional airline to cease all operations as it applied for reorganization with the bankruptcy court was Swedish carrier BRA (Braathens Regional Airlines). The company states on its website that it plans to resume activities sometime after summer.

Turkish AtlasGlobal, formerly known as Atlasjet, quit all operations shortly after filing for bankruptcy on February 13th.

Africa

Air Mauritius, the flag carrier of the East African island nation, entered voluntary administration on April 22nd. Its board said that travel restrictions related to coronavirus made it impossible for the airline to fulfill its financial obligations.

Air Mauritius, Administration, Voluntary administration
Air Mauritius is the only African carrier thus far to have failed because of the crisis. Photo: Airbus

North America

Trans States Airlines, which flew under the United Express brand, was the first US carrier to succumb to the crisis as it suspended operations on April 1st. However, it had already planned to shut down by the end of the year and consolidate with fellow United Airlines affiliate ExpressJet.

Florida-based charter airline Miami Air International filed for Chapter 11 bankruptcy protection on March 24th. The airline, operating charter flights for a diverse group of clients such as cruise operators, sports teams, and the US military, did keep flying until May 8th.

Carrier Compass Airlines, flying as American Eagle and Delta Connection, failed to find a new partnership in the light of the crisis and ceased operations on April 5th.

RavnAir, the largest regional Alaskan carrier, also filed for bankruptcy on April 5th. However, the airline stated on May 20th that it had conditional approval to seek funding from the CARES act while it looks for buyers, so its grounding might not yet be final.

Avianca Getty
Colombian Avianca has also filed for Chapter 11 bankruptcy protection. Photo: Getty Images

South America

Other than LATAM, Colombia-based Avianca filed for bankruptcy protection under Chapter 11 on May 10th after failing to meet a bond-payment deadline. It also failed to win the sympathies of the Colombian government, despite several requests for assistance.

Ecuador’s flag carrier TAME entered into a liquidation process on May 21st, as the government decided to shut down the state-owned airline.

Thai Airways
Thai Airways will undergo restructuring. Photo: Getty Images

Asia and the Pacific

Thailand’s national airline, Thai Airways, will also be reorganized under the auspices of the country’s bankruptcy court after the government approved a restructuring plan on May 19th. The airline will continue with “business as usual,” such as it is, during the process.

Virgin Australia, the country’s second-largest carrier, entered voluntary administration on April 21st. It has had plenty of potential suitors, but the four short-listed candidates have very different opinions on how they would like the airline to emerge on the other side.

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