The French Minister of Economy and Finance, Bruno Le Maire blames Norwegian Air Shuttle for the collapse of XL Airways. Following a period of financial difficulties, the French airline ceased operations on 23rd September 2019. However, authorities in France claim that other cross-continental operations had an impact on the airline’s downfall.
Aviation 24 reports that Le Maire intends to file a complaint with the European Commission about Norwegian’s public aid. The Scandinavian airline had also been going through a spell of bad luck this year with operational issues and financial troubles of its own. Le Maire argues that Norwegian has received support for its struggles while XL wasn’t treated in the same way.
“It breaks prices, it is in debt, but it has Norwegian public support, and that I cannot accept,” Le Maire claimed.
“The competition rules must be the same for everyone. We cannot accept it in Europe, we cannot accept it either from Norway. Hence, I will write to the European Commission next week to tell them, ‘Put it right,’”
Despite not being part of the European Union, Norway has close ties with it. The nation is subjected to agreements due to its membership in the European Economic Area, which was founded in 1994. By virtue, the nation benefits from certain European legislative backing.
XL suspended ticket sales on September 19th due to financial difficulties. Thereafter, the airline reached out to Air France for a rescue deal. XL reportedly needed USD$38.6 million in financing to keep its operations alive.
With the last year seeing a wave of airline collapses, XL’s case can’t be blamed solely on these local factors. Primera Air, Aigle Azur, Wow Air, Jet Airways and Thomas Cook are just some of the airlines that have gone bust.
Expansions into long-haul operations have given low-cost carriers new struggles that they previously weren’t used to. Along with this, fluctuating fuel prices have had a negative global impact on operation costs.
Ultimately, after 24 years of trading, XL struggled to compete with new market competition. Forbes reports that other European powerhouses such as Lufthansa have been experimenting with their own low-cost carriers. Air France had also expanded in this market itself with its failed Joon experiment. This low-cost operation disbanded in June 2019 after less than two years of trading.
We are yet to see the fate of XL’s fleet of four Airbus A330s. Nonetheless, authorities in France and other European nations will be hoping that legislation can protect other companies from closing. Following this tough year, airlines will also be hoping for greater structure within the aviation industry, along with stabilized costs