Airlines in trouble: who’s next in 2020?

Given the success of the article written on the same subject at the beginning of 2019, it seems that the subject interests you

So Wow Air, Air Berlin, Flybmi, Germania, Inselair Jet Airways and Primera Air, among others, have left us in the last 12 months. These were expected. More surprisingly, even if we knew their situation was fragile, we also said goodbye to XL Airways and Aigle Azur. And let’s not forget Thomas Cook that nobody saw coming… or rather leaving!

But the situation of some airlines continues to be worrying and 2020 could be complicated for them.

Alitalia: an Italian-style mess

Sorry but we have no other words to describe what Alitalia is going through since 2017 and the withdrawal of Etihad. Potential buyers slamming the door when we think the deal is done, a government that can’t come up with a project for the airline, frankly we don’t know where Alitalia is going or with whom.

A new infusion of 400 million has just been granted by the State but at the pace things are going (and the losses) it looks more like a cautery on a wooden leg.

At this stage we do not see Alitalia disappearing but the only viable outcome seems to be a nationalization for “cleaning and downsizing” in order to make the airline attractive to potential buyers.

Do we bet that in one year the Alitalia rescue soap opera will still be topical?

Norwegian continues to struggle

New CEO for Norwegian, Jacob Schram, whose mission is to finally put the airline back on the path to profitability.

Route and base closures have been carried out in order to bring the business back into line, but even though the situation is worrying, we continue to believe that Norwegian will be able to pull through.

It has checked-in a net loss in each of its last two years ($168.6 million in 2018 and $219.2 million in 2017) and will release its 2019 results in February.

Hong Kong Airlines out of breath

The political context of Hong Kong has very bad effects on the airlines that serve the island and the “local” ones in particular. If Cathay Pacific still manages to resist the shock, it is not the case of Hong Kong Airlines, the 3rd airline of the city.

At the end of November the airline was unable to pay half of its employees and removed in-flight entertainment from its aircraft because it could not pay its suppliers.

The authorities gave him until December 7 to find cash or his license would have been suspended or revoked.

The parent company of Hong Kong Airlines, HNA Group, has received in the meantime a loan of 568 million dollars from Chinese state banks, but it is not certain that the entire amount will go to the airline, given that HNA owns more than twenty companies including Hainan.

Air India: the government is considering cutting costs

It’ s difficult for Indian airlines. After Jet Airways, Air India, the national airline owned by the Indian state, is on the verge of collapse.

Privatization, a solution envisaged by the government, has failed and the words of the Minister of Aviation do not inspire optimism.

“The airline will have to go out of business if it is not privatized. Once the tender is issued, we will see how many bids are received.”

Given its overcrowded workforce, its debts and its poor reputation, it is not certain that buyers will be lining up at the door.

Kenya Airways: nationalization or nothing

Times have also been tough for the Kenyan airline, a member of Skyteam. Its president has urged the government to speed up the nationalization process, which he believes is the only way to save the airline.

It intends to duplicate the model of Ethiopian, an economically successful state-owned airline. A croire qu’en Afrique le contexte fait qu’une cIt seems that in Africa the context does not allow a private airline to succeed.ompagnie privée ne peut pas réussir.

Today, Air France-KLM holds 7.8% of Kenya Airways’ capital.

Thai in turmoil

The president of the Thai airline sounded the alarm a few weeks ago, saying that the airline’s survival was at stake. The chairman of the board of directors has since resigned.

The airline’s communication was more reassuring afterwards, saying that there was no risk of bankruptcy in the short term.

However, Thai’s quarterly results show a loss of 6.1 billion Bahts ($205 million) before tax for the first six months, four times the loss in the previous period.

South African in safeguard procedure

We said last year that the South African airline was dead but was the only one that did not realize it. It is now done and it will be placed under safeguard procedure to try to redress its finances.

The details of the rescue plan are not yet known.

We will also be watching Etihad, which continues to try to clean up its finances without its immediate survival being in question, or Malaysia, which should soon know its buyer.

Something tells me that 2020 is likely to be at least as eventful as 2019.

Photo : B747 Thai Airways by Avigator Fortuner via Shutterstock

Bertrand Duperrin
Bertrand Duperrinhttp://www.duperrin.com
Compulsive traveler, present in the French #avgeek community since the late 2000s and passionate about (long) travel since his youth, Bertrand Duperrin co-founded Travel Guys with Olivier Delestre in March 2015.
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