Airline start-ups and failures in 2017

FlightGlobal data shows that 39 new airline operations were established over the first eight months of 2017, roughly matching the 37 airlines that ceased operations or suspended flights.
The 39 start-ups include some subsidiary carriers created to enter new markets – or, in the case of EasyJet Europe, to ensure continuity of operations ahead of the UK’s exit from the European Union.
Notable start-ups include IAG’s new long-haul low-cost operation Level. The airline launched flights out of Barcelona in June – providing a competitive response to Norwegian’s launch of long-haul flights from the same airport.
Level began Airbus A330 flights to Buenos Aires, Los Angeles, Oakland and Punta Cana using aircraft operated by IAG sister carrier Iberia. In December it announced Paris Orly as its second base, in a move that involves taking over the air operator’s certificate of another IAG unit, OpenSkies.
British Airways originally conceived OpenSkies as an all-premium carrier but its aircraft were subsequently reconfigured to include an economy-class section and its route network has remained limited. The OpenSkies division – which serves New York and Newark from Orly using Boeing 757 and 767 aircraft – will “cease to operate” at the end of summer 2018.
Air France-KLM meanwhile launched services with its new hybrid operation Joon at the start of December. Initially operating from Paris Charles de Gaulle to Barcelona, Berlin, Lisbon and Porto, it will begin long-haul flights to Fortaleza in Brazil and Mahe in the Seychelles in summer 2018.
In Russia, Azimuth launched flights in September, initially from Rostov-on-Don airport, before becoming one of the initial tenants at that city’s new Platov airport, which opened on 7 December. While Russian regulations require two years of domestic flights before launch of international operations, Azimuth is already seeking authority to begin routes within the Eurasian Economic Union (EEU). Meanwhile, Azerbaijan Airlines’ new low-cost unit Buta Airways started operations in September.
But planned Swiss start-up Powdair, which had planned to begin ski services from Switzerland’s Sion airport earlier this winter, pushed back its launch into 2018 following talks with potential new investors.

New latin steps
In Latin America, Chile is the latest country where Indigo Partners – backer of several successful low-cost operators – is looking to deploy its formula again.
Santiago-based JetSmart launched revenue services in late July as it builds up its network to initially eight domestic destinations. JetSmart began operations with a pair of A320s and aims to build this fleet to at least nine of the Airbus narrowbodies, says chief executive Estuardo Ortiz.
Further ahead, he says, the carrier aims to begin flights to Peru. That is a market in which one low-cost carrier entrant has already emerged this year, with Viva Air launching its second carrier in the region. Viva Air Peru started operations in May, initially deploying a pair of Airbus A320s on seven domestic routes.
In a strong reflection of Argentina’s freshly liberalised aviation industry, three new airlines made progress in launching operations during 2017.
Avianca Argentina, owned by Colombian carrier Avianca’s majority shareholder Synergy, began flights on 21 November with ATR 72-600s. It plans to initially operate to Buenos Aires Aeroparque, Rosario and Mar del Plata.
Low-cost start-up Flybondi took delivery of its first Boeing 737-800 ahead of the launch of services. Meanwhile, Norwegian’s new subsidiary in Argentina is set to start domestic and regional flights next year, connecting with its Buenos Aires to London Gatwick service, which begins in February.
In the Middle East, Saudia launched a new low-cost operation. Flyadeal began domestic flights in September using the first of eight Airbus A320s being leased from Dubai Aerospace Enterprise.
Omani start-up SalamAir launched services in January. It initially began flights on the Muscat-Salalah domestic route, but subsequently added flights to Dubai and the Saudi Arabian cities of Jeddah and Medina, as well as Karachi and Sialkot in Pakistan.
Meanwhile, Kuwaiti carrier Wataniya Airways relaunched operations this summer with a pair of A320s – six years after ceasing flights – having gained an AOC in June. It underlined its growth plans by tentatively signing for 25 Airbus A320neos during November’s Dubai air show.

Suspensions
Two high-profile European names were lost from the skies in the autumn of 2017 as long-standing financial challenges caught up with Air Berlin and Monarch Airlines.
Oneworld carrier Air Berlin was forced to open insolvency proceedings in August after key shareholder Etihad Airways pulled the plug on further funding for the German carrier. That followed several restructuring initiatives that had failed to stem the losses at Air Berlin, and a wider review of the Gulf carrier’s European investments.
Air Berlin, which had grown through a series of acquisitions, was subsequently broken up as administrators secured bids for various assets from EasyJet and Lufthansa, and carried out the last flights under its own brand at the end of October.
EasyJet is using former Air Berlin slots and aircraft to establish an operation from Berlin Tegel, while Lufthansa – which already had a wet-lease deal in place with Air Berlin – is acquiring assets including regional operator LGW.
But the group dropped a plan to acquire Austrian leisure carrier Niki after European competition regulators indicated that they would not approve the acquisition with Lufthansa’s offered remedies. This prompted a fresh attempt in mid-December to secure bidders for Niki and its assets. Administrators are in talks with four bidders and aim to finalise a deal by year-end.
Another of Etihad’s former European investments, Swiss regional operator Darwin Airline, also ceased operations in 2017. The Gulf carrier sold its 33% stake – which it acquired four years ago, initiating a period during which Darwin operated as Etihad Regional – as part of a wider acquisition of the Lugano-based airline by Adria Airways in July.
Darwin subsequently operated as Adria Airways Switzerland, but in late November filed to restructure under Swiss insolvency rules, citing unfavourable market impacts. Later in December a Swiss court ruled it bankrupt, prompting its liquidation.
Etihad also pulled out of further funding of a third European carrier, Alitalia, after unions rejected proposed cost cuts. Administrators for the Italian carrier are seeking fresh investors for the airline, which has secured a bridging loan to continue operations until the summer whilst it restructures.
Alitalia and Air Berlin, among other contributory factors, struggled in the hugely competitive European short-haul market, which also played a part in the demise of the UK’s Monarch Airlines. That leisure carrier found itself squeezed in the UK-Mediterranean resorts market after security concerns hit tourism demand in North African and Turkish markets. Having secured an 11th-hour reprieve in gaining an extension to its ATOL licences in October 2016, it ran out of time to broker a repeat this time around and ceased flights on the morning of 2 October.

Eastern fails to revive
A six-year effort to revive the Eastern Air Lines brand with a new low-cost carrier serving the Caribbean and Latin American market from Miami ended in November when US regulators cancelled its economic authority to operate. That came more than two months after the carrier ceased operations following its acquisition by luxury private charter Swift Air.
The Miami-based start-up had already surrendered its AOC to the US Federal Aviation Administration after ceasing operations on 7 September. Eastern Air Lines’ new owners at Phoenix-based Swift Air did not object to the DOT’s move, the agency said. But it noted that the move did not prejudice the company’s filing for new authority in the future.
Meanwhile, Ed Wegel – the revived Eastern Air Lines’ co-founder – has since moved on to acquire the AOC of defunct charter and freighter airline World Airways. The new start-up plans to make another attempt at a low-cost airline dedicated to the Latin American and Caribbean markets.
Elsewhere, Hawaiian operator Island Air ceased operations in November a month after filing for Chapter 11 bankruptcy protection. Hawaiian Airlines has since made an offer to acquire some of the assets of the operator.

Source: FlightGlobal

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