Which Airlines may be next to Fold?

ozfflyer

Suspended
Joined
Dec 22, 2018
Posts
991
thomas cook gone

jet airways india gone

cobalt gone

numerous otheer EU operators gone

JQ NZ domestic goning

Condor next ?

Norwegian ?
 


Slovenia's Adria Airways files for bankruptcy

+ TG now doing $950 return fares to EU in June/July school holidays
 
Article on FT’s blog about lease returns. Doesn’t say much but has a ‘where are they now’ list of Thomas Cook, Aigle Azur, XL and Adria aircraft.

FT lease returns

Cheers skip
 
Flybe on the brink as government urged to step in

Europe’s largest regional airline seeks state help to stave off collapse


i feel awful for the staff, and the potential job losses... but the airline itself didn’t have very friendly policies... for example a cabin bag limit that was like 5 inches under anyone else... meaning you couldn’t fly around europe swapping between Flybe and other carriers. So they lost my business :(
 
Sponsored Post

Struggling to use your Frequent Flyer Points?

Frequent Flyer Concierge takes the hard work out of finding award availability and redeeming your frequent flyer or credit card points for flights.

Using their expert knowledge and specialised tools, the Frequent Flyer Concierge team at Frequent Flyer Concierge will help you book a great trip that maximises the value for your points.

I see that some travel businesses have folded. As technology changes and so do peoples spending habits, it is inevitable that old-school businesses die, and likewise new ones will rise. And marginal airlines are exactly that - living on the edge. This has been the same for ever.

But to be blatantly clear, unless I read your posts, I personally would have been unaware that there is a recession. Maybe it is a recession just for some?

From what I can see, it’s a retail recession. But then I’m probably part of the cause, as I haven’t been in a department store in years. I buy many things on-line, but not because I don’t want to buy from the locals, but because I can’t. The car industry seems to be shooting itself in the foot, with price rises and charges for accessories that seem totally out of touch with any reality. A model change should not be an opportunity to put the price up by $10-20k. It simply makes the old one that I have more attractive. Zillion dollar phones have to last longer...put the price up by 30% (Apple), and the old one has to last 30% longer.
 
The airline industry is littered with corpses like the climb route to Everest. It is not necessarily associated with a recession, but a recession shines a spotlight on the weak. Thats good, because efficient allocation of capital means that poorly performing businesses should not get more capital without restruturing/closing. But you don't need a recession for this to happen. Capital allocation is continuous excercise. Constant renewal is good.

Can you point to one in your list where they have closed due to a recession?
 
Last edited:
thomas cook gone

jet airways india gone

cobalt gone

numerous otheer EU operators gone

JQ NZ domestic goning

Condor next ?

Norwegian ?
Reasons for Collapse but I contend that none due to recession

(a)Thomas Cook:
Unable to secure ongoing debt funding (the capital allocation reason)
Was not able to compete with changing customer habits - who are increasingly booking online without an aggregator like TC.
The numbers of British holiday makers actually increased but TC was unable to capture it. The business went to Ryan Air, Easy Jet, AirBnb
No recession in UK even though Brexit looming despite what doomsdayers say

(b) Jet Airways:
Offering a premium service in a cost conscious environment. Therefore could not compete with SpiceJet and IndiGo. One of the reasons I always maintain QF cannot fly direct to India. A LCC may have better luck in that market. No recession in India. Not India's flag carrier so relies on Capital markets. Capital said no more.

(c)Cobalt:
Small airline who had to pay the EU a massive fine after the EU determined it received illegal state bailout under EU rules. Could not secure further funding (the capital allocation reason again)
Trying to compete in a tight market

(d)Norwegian:
The original international long haul LCC beset with massive crippling debt
Grounding of 787 with the RR engine issue forcing it to wetlease some A380 at high cost (but paying for it with LCC fares)
B737-Max issues
Their business model gave them first mover advantage, but the other airlines adapted.
In the end Capital said enough is enough.

The airline industry has always been a low margin, high fixed costs game.
 
Last edited:
The Frequent Flyer Concierge team takes the hard work out of finding reward seat availability. Using their expert knowledge and specialised tools, they'll help you book a great trip that maximises the value for your points.

AFF Supporters can remove this and all advertisements

I meant to add MH here but I just read that they have golden skies ahead of them...
 
With the massive down turn in the airline sector, what airlines do you predict will fail?
 
I doubt Tigerair will ever fly again.

Virgin Australia could be a likely candidate and that's even looking at this globally, although it wouldn't be a good look for the government to let such a visible brand die just as it insists it is successfully "hibernating" the economy.

Virgin Atlantic isn't looking so hot right now, either.

I expect Hainan's days are even more limited than they already were.

Asiana was also already in trouble and I wouldn't want to be them right now but I expect they'll be allowed to survive to avoid a Korean monopoly (perhaps wishful thinking as they're my source of *G status).

Norwegian and Brussels Airlines would be my top picks in Europe to go. Air Malta could go too.

I don't think Etihad will be "allowed" to fail but this certainly won't help as they were already the weakest of the ME3.

On the opposite end of the spectrum, I think Alitalia and South African which have been circling the drain as of late are actually less likely to fail now. The former's been nationalised and the latter will successfully use this period to reorganise operations and downsize personnel in a way they probably wouldn't have gotten away with previously. Air India and Aerolineas Argentinas were also a mess but will likely be saved ironically because of this too.
 
Two other recent commentaries here (including mine):
 

Enhance your AFF viewing experience!!

From just $6 we'll remove all advertisements so that you can enjoy a cleaner and uninterupted viewing experience.

And you'll be supporting us so that we can continue to provide this valuable resource :)


Sample AFF with no advertisements? More..
Back
Top