Tag: Airline BankruptcyView All Tags
Airline Bankruptcy / Japan Airlines / JAL / Airlines / Airline News / Airline Industry / Japan Travel / → All Tags
This time last week there were a wealth of confusing options for keeping Japan's troubled flagship carrier, Japan Airlines, out of bankruptcy. There was talk of bankruptcy-avoiding restructuring. There was talk of a kind of half-bankruptcy where the airline would stay listed on the Tokyo Stock Exchange. There was talk of a government bailout. And the conclusion? Nope and nope and nope.
A final decision on the future of Asia’s largest carrier, founded in 1951, may be made this week, and a bankruptcy filing will follow next week, according to three people familiar with the situation. The finance ministry and the Tokyo-based carrier’s biggest lenders all favor a court restructuring, according to people familiar with the matter.
Your holiday air travel may have been a little difficult, but at least your airline is likely still in business for your trip back home. That’s not the case for many unlucky passengers that were counting on Spain’s Air Comet to fly them back from holiday trips. The airline shut things down last week, stranding passengers and providing pink slips to more than 600 employees. The whole problem started because the airline kind of didn’t pay the bills for its leased airplanes—oops!
The airline primarily flew to Argentina, Ecuador, Peru, and other countries in the region to and from Madrid. That means there were passengers stuck all over the place. Thankfully, charter flights were provided to help out the stranded passengers, but at first only about half of the travelers got the chance to get out of the airport. Hopefully a few more private planes will be shuttled back and forth to get the remaining passengers where they need to be so they can at least welcome 2010 without too much stress. We really feel for the stranded passengers and wish them luck with this whole ordeal.
Airline Hell / FlyGlobespan / Airline Bankruptcy / Airline News / LCCs / Scotland Travel / → All Tags
We really hate it when this happens, especially when it happened to Slovakia-based SkyEurope only a few months ago, but Scotland's LCC airline FlyGlobespan has shut down abruptly, stranding thousands of their passengers around Europe and canceling future flights and vacations. The airline stopped trading yesterday and entered administration; in laymen's terms they are bankrupt.
And just like with SkyEurope, other European airlines are doing their best to mobilize and rescue some 4,500 stranded former FlyGlobespan passengers trapped on holiday mainly in Spain, Portugal, Cyprus and Egypt. Ryanair was the first to jump on offering "Globespan Rescue" rates from 59 GBP ($96.50), which is pricey for the LCC but reasonable if you consider the last-minute, space-available nature of these rescue seats.
Skybus / Airlines / Airline News / LCCs / Airline Bankruptcy / → All Tags
If a cheap flight is on your holiday wish list, an airline like Skybus would really help out Santa and his elves this year. Too bad we all know what happened to that little orange airlineit crashed and burned on the balance sheets. Long after the airline’s demise, the former CEO Bill Diffenderffer is speaking about what went wrong with his airline. Unfortunately, it was always pretty clear to us, costs went up like crazy and the airline’s fares went down like crazy. At least we finally got to hear something from the big boss.
He stated that the airline ran into lots of trouble all at the same time. Diffenderffer did take responsibility for the failure of the airline, because as he sees it, he was in charge and he did not get the job done. The combination of high oil prices, sinking passenger confidence, and weather problems all led to the airline's adios from the commercial airline business. Planes breaking down and lacking the necessary back-up aircraft didn’t help the cause either.
There will be no more SkyEurope in the sky...um, over Europe, as the low-cost airline based out of Slovakia ceased operations this morning thanks to bankruptcy. As a result, its five planes (down from 15 in the past) had their flights cancelled, stranding passengers at airports like Bratislava, Prague, and Paris-Orly.
Not only has the deep-sixed airline left their customers in the lurch, but they've also pulled a jerk move in refusing to refund any of the tickets. Instead, they posted a statement to their website encouraging would-be SkyEurope passengers to dispute the ticket charge with their credit cards and then book a flight home on another airline, at additional expense. Them's fighting words!
Airline News / Southwest Airlines / Frontier / US Airways / Airline Bankruptcy / Northwest Airlines / → All Tags
U.S. airlines served 282 million passengers in the first five months of this year, a 9.5-percent decrease on a year-on-year basis, U.S. business news outlets reported Friday. Figures released by the U.S. Bureau of Transportation Statistics also show that, in the current economic downturn, nearly all U.S. airlines, except Southwest Airlines and US Airways, suffered steep drops in the number of passengers during the period.
Major airlines were hit much harder than LCC's, with Northwest Airlines leading the decline by posting a -20.2% plastering. Southwest served the most passengers, but even they took a 5.3% hit.
Have you got a spare $108 million dollars burning a hole in your pocket, just itching to purchase a bankrupt airline? Well, too bad you missed your chance; yesterday saw the sale of ailing Frontier Airlines to Republic Airways.
And now you ask: "Who/what/where is this 'Republic Airways?!?!'" We know, it's a surprise victor since Southwest was clearly the favorite and even bid $170 million to Republic's measly $108. Airline dorks who love this sort of dramaok, ourselvesknow Republic as the company behind airline brand extensions to smaller, regional service; they specifically run AmericanConnection, Continental Express, Delta Connection, Midwest Connection, United Express and US Airways Express.
The bad news? Frontier Airlines is bankrupt! (Actually, they have been since April 2008.) The good news? Southwest is looking to buy the ailing airline next month in bankruptcy court for a minimum bid of $113 million.
Southwest has posted a Q&A with Ron Ricks, Executive Vice President Corporate Services and Corporate Secretary on their blog. Some highlights?
Southwest is still preparing the [bidding] proposal, so it's premature to comment on the specifics at this time. What we can say is that we are interested in a substantial investment in Frontier and to operate Frontier as a wholly-owned subsidiary, independently and separately from Southwest Airlines, for a period of time until the carrier could be combined into Southwest.
Skybus / Airlines / LCCs / Airline Bankruptcy / → All Tags
You know we love Skybus, and even though it’s long gone, every once in a while a little tidbit trickles out from its former base in Columbus, Ohio. Nearly a year after its demise, it looks like the airline is finally settling things up with its former workers. They’ve agreed to settle a class-action lawsuit that was filed by employees who were less than thrilled when they found out that their jobs were abruptly terminated.
The lawsuit alleged that Skybus violated the Workers’ Adjustment and Retraining Notice Act by not giving employees advance notice of at least 60 days. If the employees are anything like us—we found out by watching the Today show and throwing the remote across the room—they didn't get any warning.
The details are still being worked out in bankruptcy court—sounds exciting—so no specific settlement figure has been announced yet. The Columbus Regional Airport is trying to get some $5 million in change as well, and it looks like when everything is finalized, Skybus will be able to pay about 76 cents on the dollar to those who it left high and dry—guess that’s better than getting nothing.
Midwest Death Watch / Midwest Airlines / Airline Bankruptcy / Zagat Survey / Virgin America / Singapore Airlines / → All Tags
The annual Zagat Survey look at airlines is out today, and leather seats are in. Despite a monumentally rough year, Midwest Airlines is still the favorite "mid-sized" airline for coach of the nearly 10,000 people Zagat polled this year. Among bigger players, JetBlue took the top slot with Southwest coming in second. Yep, those chairs are leather, leather and leather.
Midwest, however, didn't show up in the list of winners for "mid-sized" premium product--which isn't surprising given that passengers now have to pay extra for the swanky seats that used to be free. Virgin America, instead, pulled first place for first class; in-seat massages probably helped, uh, finesse the results.
Among legacy carriers, Continental did better than its peers, apparently because survey respondents think free airline food is priceless. (We'd call it worthless.) For international trips, Singapore was the top pick either up front or in coach, but you won't go wrong, Zagat says, with either Emirates or Cathay Pacific either.
Short answer: Probably not. While the European Union said Wednesday that a group of new investors could take over the money-hemorrhaging airline, Alitalia will also have to pay back a €300 million ($377 million) rescue loan it received from the Italian government. No one's quite sure where that money's going to come from.
Meanwhile, some staff are organizing impromptu (i.e. wildcat) strikes at airports, delaying departures and forcing flight cancellations. Italian newspaper La Repubblica says even the corpse of a woman headed to Albania can't get where its going, languishing instead at Fiumicino. While Italy's labor minister has suggested the strikes are illegal, that's of little consolation to stranded fliers.
The new Alitalia is supposed to debut on December 1. Will it be ready to fly by then? And will Ryanair's allegation that this takeover is against EU rules further stall the much-needed makeover? We're not planning to find out.
· EU Backs Proposed Alitalia Takeover [AP, via Google]
· Alitalia Protests Continue, Government Eyes Options [Reuters]
· Ryanair to Appeal EU's "Corrupt" Support [AFP, via Google]
· Fiumicino: Even a Corpse, Delayed for Days [La Repubblica, in Italian]
And we thought Michael O'Leary was overstating the likelihood of airline failures.
The situation is particularly dire in Asia, an emerging market where airlines surged ahead to suit growing demand, only to see their bookings fall dramatically when the economy took a hit. Carriers from India’s Jet Airways to Singapore Airlines are all frantically selling off planes and reducing routes in an attempt to mitigate hemorrhaging profits.
Says one industry consultant:
There is no airline in this region--and that probably goes for most of the world too--that can be confident they will still be here this time next year.
This is going to be a watershed, if it's not already, not just for the industry but for the global economy... Any airline that thinks otherwise is seriously at risk.
At least the service is still good. The day Asian airlines start cutting amenities so their in-flight service resembles the stiff and starving flights within the United States, we’re just going to give up traveling altogether.
· Analsysts Warn of Asia Airline Failure as Tourism Slows [Reuters]
· "Dark years" Ahead for Asian Airlines [AFP, via Google]