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As a decade draws to a close, one over-riding theme has been consolidation in both Europe and the US.
Whilst there are still many independent European carriers such as Finnair, SAS and TAP Air Portugal, air travel in Europe is inexorably consolidating into either easyJet and Ryanair or Air France-KLM, IAG and Lufthansa.
A very large number of airlines in Europe have failed. According to figures from IAG, since 2000 154 short-haul airlines were launched in Europe and 107 failed.
Other airlines including CityJet also withdrew from scheduled passenger services. There were also some such as Odyssey Airlines which, to date, have not got off the ground.
Here are some of the airlines and brands around the world we lost from 2010 onwards. The list being so long, it has been published in two parts. Here is the second part.
Founded in 1946, French airline Aigle Azur suspended operations in September 2019 after failing to secure a buyer.
Its operations were based at Paris Orly Airport and it flew principally to destinations in Algeria as well as other destinations in Africa, Europe and the Middle East.
Founded in 1979, Air Berlin was Germany’s second largest airline.
Having previously acquired airlines such as dba (formerly Deutsche BA) and LTU, it had all the structural and operational complexities to match.
In its later years, it was a member of the Oneworld alliance, but with relatively limited relations with its alliance partners. It never joined the transatlantic joint business with American Airlines and BA. Etihad was also a minority shareholder as it sought to use Air Berlin as a conduit to draw long-haul traffic from Germany to its hub in Abu Dhabi.
A near permanent state of restructuring could not turn the airline’s fortunes around and the delays to Berlin Brandenburg Airport meant it never fulfilled its ambition to become a major hub airline.
After suspending all long-haul operations, the final flight took place on Friday 27 October 2017 under flight AB6210 from Munich to Berlin Tegel. Most of its short-haul operations have been acquired by either easyJet or Lufthansa. Its sister airline Niki was acquired by Laudamotion, which is now part of Ryanair.
bmi British Midland
bmi British Midland (“bmi”) and BA were once fierce rivals at Heathrow.
Although bmi’s history is almost as long as BA’s it was in the 1980s that BA and bmi started to compete head to head on domestic routes at Heathrow, initially to Glasgow to Edinburgh. This was at a time when route authorities were granted by the Government.
Whilst bmi was by some distance the second airline at Heathrow and it had nowhere near the international presence of BA, it inspired tremendous loyalty from its frequent flyers. It had far more stable industrial relations than BA at Heathrow. Many domestic passengers also complained that BA would always cancel domestic flights first in the event of operational disruption.
For many years, bmi was deeply frustrated that it could not fulfil its ambition to launch transatlantic flights from Heathrow which, due to the Bermuda II treaty, BA and Virgin Atlantic were the only UK airlines that could do so. It had even acquired a fleet of long-haul Airbus A330 aircraft which were subsequently used to operate transtlantic routes from Manchester. As the UK member of Star Alliance it also had the financially and operationally thankless task of providing short-haul feed to Star Alliance airlines at Heathrow.
Facing increased competition from low cost airlines, bmi sought to reinvent as a medium / long-haul airline. Whilst the difficult launch of Mumbai proved to be short-lived, it did launch services to Jeddah and Riyadh in Saudi Arabia, Cairo and Moscow. bmi also acquired former BA franchise partner British Mediterranean in 2007. Whilst this bolstered bmi’s portfolio of medium-haul routes, many of these were to areas very exposed to geopolitical events.
How bmi ultimately came to be acquired by BA dates back to 1999 when bmi’s controlling shareholder Sir Michael Bishop entered into a “put and call” agreement with Lufthansa.
In 1999, Lufthansa acquired a 20% share of bmi for £91.4m, which valued the airline at £457m. Sir Michael also made a deal whereby he could exercise an option to sell his controlling stake in bmi of 50% plus one share to Lufthansa for £298m.
In 2008, Sir Michael exercised his option. Lufthansa baulked at the price and reached an out of court settlement with Sir Michael. Lufthansa paid Sir Michael £175m to give up his option right, and £48m to acquire his share, valuing the airline at just £98m.
Although this was seen by commentators as a major opportunity for the dominant Star Alliance airline to gain a foothold at Heathrow, it did not turn out that way.
In 2011, faced with continued heavy losses, Lufthansa decided to entertain offers to buy bmi. In spite of Virgin Atlantic making a lot of noise, IAG emerged as the only credible bidder. IAG took control of bmi in 2012. BA wasted little time in suspending former bmi routes and very few now remain such as Amman, Beirut, Belfast, and Dublin.
As part of the deal, BA was required to make slots available to competitors on overlapping routes such as Aberdeen and Glasgow. These were initially taken up by Virgin Atlantic Little Red, and are now used by Flybe, which will be rebranded as Virgin Connect in 2020.
IAG also shut down bmi’s low cost off-shoot bmi baby. It’s regional operation bmi regional was sold to private investors. However, this collapsed in 2019.
Cobalt Air had a relatively short life.
It began operations in 2016 and flew from London Gatwick, Heathrow and Stansted to Larnaca and from London Gatwick to Athens. It collapsed in October 2018.
Continental Airlines merged with United Airlines on 1 October 2010.
It was something of an understatement to say that there were considerable operational issues in the early days of the merger. Bringing together two radically different cultures as well as two unionised workforces was never going to be easy, but it took an extraordinarily long time to fully merge the two operations.
After some difficult years and very high profile customer service and IT failures, United has started to find its feet with significant investments in its “Polaris” long-haul business class cabin and lounges.
Cyprus Airways collapsed in January 2015 after nearly 70 years of flying after the European Commission ruled that financial support received by the airline was state aid and had to be repaid.
Germania was a small charter / scheduled airline, founded in 1978 and collapsed in 2019.
Jet Airways was founded in 1993 and was once India’s largest airline by market share.
It began flying from London Heathrow in 2005 following a relaxation of a bilateral treaty which allowed more flights between the UK and India. Etihad acquired a 24% stake in the airline in 2013, one of many truly disastrous investments by Etihad.
Its collapse in 2019 due to heavy losses and an over indebted balance sheet was a long drawn out affair. Flights were subject to significant disruption as aircraft were impounded by lessors. International flights even had to operate without in-flight entertainment due to non-payment of licence fees. Employee salaries were also unpaid.
The airline finally suspended operations in April 2019 after it failed to secure new investment from the State Bank Of India or new investors.
Joon was not an airline as such, merely a brand within an airline.
Ostensibly, it was an airline brand aimed at millennials and took over certain routes from Air France. However, Joon branded flights were operated by Air France pilots under Air France flight numbers but with cabin crew employed on different contracts. These cabin crew would also wear trainers and serve organic smoothies to passengers.
The whole project never made sense. There was nothing about the routes it took over such as Manchester or Madrid that merited them to be served by an airline aimed at millennials. One of the many curious aspects of Joon is how it claimed to be “also an airline”. There are many businesses that can be a better lifestyle brand than an airline.
The recently appointed CEO of Air France KLM Benjamin Smith wasted little time in canning the whole project.
Joon was a perfect example of using branding and design to try and sidestep, rather than tackle, an issue.
Like Jet Airways, Kingfisher Airlines experienced a long drawn out collapse due to heavy losses and over indebtedness.
Founded by entrepreneur Vijay Mallya, its licence to operate was finally suspended by Indian aviation authorities in October 2012 after months of disruption, which included the suspension of its one long-haul route from London Heathrow to Mumbai. It was even forced to suspended operations after a revolt by staff who had not been paid their salaries for months.
Vijay Mallya is currently appealing a decision by the UK Government for him to be extradited to India to face allegations of fraud and money laundering.
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