Airline bankruptcies surge, leaving rivals vying for planes

Airline consulting firm IBA has tracked plane fleets returned to lessors or administrators by 17 carriers that have gone bust so far this year. (AFP)
Updated 04 October 2019

Airline bankruptcies surge, leaving rivals vying for planes

  • ‘2019 has seen the fastest growth in airline failure in history,’ said airline consulting firm IBA
  • 17 carriers that have gone bust so far this year

PARIS: Airline bankruptcies have increased this year at the fastest ever rate, led by the collapse of India’s Jet Airways, British travel group Thomas Cook and Avianca of Brazil, according to industry data published on Friday.
“2019 has seen the fastest growth in airline failure in history,” said airline consulting firm IBA, which has tracked plane fleets returned to lessors or administrators by 17 carriers that have gone bust so far this year.
More may follow as weaker players are squeezed by low-cost competition and higher fuel costs exacerbated by a strong dollar — which hurts those selling tickets in euros or pounds and buying kerosene and planes in the US currency.
“The last quarter of the year tends to see more failures during the northern hemisphere winter,” Phil Seymour, IBA’s chief executive, said in an interview. US carriers have been spared by the “natural hedge” of dollar revenue, he added.
The run of bankruptcies has also created opportunities for stronger carriers to pick up planes, traffic and airport slots abandoned by collapsed rivals.
Other airlines that have folded in 2019 include France’s Aigle Azur and XL Airways, Germania, Flybmi and Adria of Slovenia, which filed for bankruptcy this week.
Indian low-cost carrier SpiceJet said on Friday it may take more Boeing 737 MAX planes ordered by Jet Airways, which went bust in June.
The entire global MAX fleet numbering hundreds of the new jet remains grounded awaiting approval of software changes to address safety concerns after two fatal crashes. That has increased the jostling for substitutes, driving up waiting times and prices for new, second-hand and leased airliners.
Leading European low-cost operator Ryanair, which has been hit hard by the MAX grounding, is seeking to take over Airbus A320-family aircraft previously leased by Thomas Cook and deploy them at its Austrian carrier Lauda.
“Opportunities crop up out of things like the failure of Thomas Cook,” Ryanair group CEO Michael O’Leary said at a Reuters Newsmaker event in London on Tuesday.
“We’re talking to a number of the leasing companies about taking some of those Airbus aircraft and putting them into Lauda next summer,” he said.

Britain, EU tell each other to move on trade

Updated 20 October 2020

Britain, EU tell each other to move on trade

  • Both sides call on each other to protect billions of dollars of trade between the neighbors

BRUSSELS: Britain and the EU said on Monday the door was still open for a deal on their post-Brexit relationship, calling on each other to compromise to find a way to protect billions of dollars of trade between the neighbors.

With just over two months before Britain ends a status quo transition arrangement with the EU, talks on a trade deal are deadlocked, with neither wanting to move first to offer concessions.

A no-deal finale to Britain’s five-year Brexit drama would disrupt the operations of manufacturers, retailers, farmers and nearly every other sector — just as the economic hit from the coronavirus pandemic worsens.

European Commission Vice President Maros Sefcovic repeated on Monday that the EU still wanted a trade deal but not “at any cost” after British Prime Minister Boris Johnson said on Friday there was no point in continuing talks.

“It has to be a fair agreement for both sides — we are not going to sign an agreement at any cost,” Sefcovic told reporters after meeting Michael Gove, Britain’s point man on the existing divorce agreement, in London.

“The EU is ready to work until the last minute for a good agreement for both parties,” Sefcovic said.

Britain, increasingly frustrated by the EU’s refusal to start text-based talks, called on the bloc to make the first move, with its housing minister saying that Brussels only had to make “some relatively small but important changes.”

Housing Secretary Robert Jenrick called on the EU to “go that extra mile, to come closer to us on the points that remain for discussion.”

A spokesman for Johnson again ruled out prolonging any negotiation beyond the end of this year, when the transition period runs out, saying the EU “must be ready to discuss the detailed legal text of a treaty in all areas with a genuine wish to respect UK sovereignty and independence.”

EU chief negotiator Michel Barnier had been due in London for talks with British counterpart David Frost this week. Instead, they will now speak by telephone on Monday to discuss the structure of future talks, Barnier’s spokesman said.

Negotiations broke down on Thursday, when the EU demanded Britain give ground. Issues still to be resolved include fair competition rules, including state aid and fisheries. EU diplomats and officials cast Johnson’s move as a frantic bid to secure concessions before a last-minute deal was done, and European leaders have asked Barnier to continue talks.

British officials have repeatedly said any deal has to honor Britain’s new status as a sovereign country and not try to tie it to EU rules and regulations.

German Chancellor Angela Merkel said compromises on both sides would be needed. French President Emmanuel Macron said Britain needed a deal more than the 27-nation EU.

Britain is launching a campaign this week urging businesses to step up preparations for a no-deal departure. In a statement accompanying the launch, Gove says: “Make no mistake, there are changes coming in just 75 days and time is running out for businesses to act.”

More than 70 British business groups representing over 7 million workers on Sunday urged politicians to get back to the negotiating table next week and strike a deal.