easyJet and Air France have withdrawn their interest in rescuing Aigle Azur, the bankrupt French airline. easyJet had expressed an interest in the collapsed airline, but today it withdrew its bid.
An overnight deadline was in place for competing airlines Air France-KLM and easyJet so they could improve their bids, but both airlines missed it, Reuters reports. The two companies had previously expressed interest in acquiring part of the operations and staff of the collapsed French airline.
Why did the two airlines retract their bids?
On Thursday, an Air France spokeswoman quoted by Reuters confirmed the airline’s decision against submitting a joint offer with Air Caraibes citing that the airlines “conditions for doing so weren’t met.”
easyJet also communicated that the company “has taken the decision to withdraw from the submission process to acquire parts of Aigle Azur’s operation,” a spokeswoman declared via email to Reuters.
Easyjet also mentioned that the company “remains committed to France” and to the routes it currently operates from Orly.
What does this mean for Aigle Azur?
Aigle Azur has been struggling to find buyers for parts of its business, in a bid to save a proportion of its 1,150 jobs. The biggest shareholders of the airline are Brazilian entrepreneur David Neeleman and China’s HNA Group. The airline has expanded into long-haul flights, but the venture was not successful and eventually resulted in bankruptcy.
Today’s news represents a major blow for the French airline, as it continues to struggle while being granted protection from creditors earlier this month. Approximately 19,000 passengers were stranded when the company grounded its 11 Airbus jets.
Why were easyJet and Air France interested in rescuing Aigle Azur?
Bankruptcy proceedings showed that Aigle Azur had debts of 148 million euros, amounting to about half of the company’s revenues in 2018. The debts were much higher than anticipated, but bidders including Air France and easyJet were not put off. They remained attracted by the flying rights Aigle Azur had to foreign destinations and the valuable take-off and landing slots it held at Orly.
Purchasing Aigle Azur‘s parts proved to be difficult for Air France though, as the deal would have meant a complex negotiation with its unions, due to internal rules that prohibit the company to granting a flight or senior captain roles to new hires.
The situation at Aigle Azur remains volatile, with French Transport Minister Jean-Baptiste Djebbari remaining in contact with potential investors and the unions. The liquidation of the company has been ordered by the Evry commercial court and hearings resume on September 23.