Air Belgium is now effectively performing a liquidation sale, after being given four months to find a buyer as it undergoes judicial liquidation with asset transfer. The company that once boasted an array of commercial long-haul destinations such as Hong Kong, the French Caribbean islands, South Africa, and Mauritius now finds itself facing full or partial sale and owing refunds to 11,000 passengers.
No recovery
Launched in just 2016, Air Belgium faced strong headwinds early in its life, its bottom line battered by the Covid-19 pandemic, rising fuel and wage costs, diminished purchasing power due to the war in Ukraine, and increased competition, resulting in losses of more than €119 million.
Despite consolidating and dropping the costliest flights, such as to the Caribbean and the French West Indies, it was unable to recover and ceased passenger operations altogether in October 2023. Since then it has served only cargo and business-to-business customers as it has sought more time from the Walloon Brabant Business Court to find investors.
The airline has however failed over the last year to sell or restructure the business. Part-owned by government entities Wallonie Entreprendre (35%) and the Federal Investment and Participation Company (SFPI) (12.5%), alongside Chinese logistics firm Hongyuan (49.95%), its last action on 9 July was a successful request to reclassify the business reorganisation, meaning the procedure would no longer be classed as an “amicable settlement” but a “collective agreement.”
Creditors await asset sale
Now its 500 employees must continue operating as they go through a liquidation process that will attempt to preserve as many jobs as possible and obtain the highest possible bid. Founder and CEO Niky Terzakis has said that could mean the sale of the carrier either in its entirety or split into its profitable parts.
In addition to the remaining freight and ACMI business, assets up for grabs include at least three Airbus A330 aircraft, and two Boeing 747-8, with some of the fleet leased or wet-leased to other airlines. With bank creditors awaiting the sale to recuperate their losses, passengers are likely to be at the back of the queue when it comes to their refunds.
Under laws introduced in September 2023, Air Belgium is set to liquidate by transferring its assets or activities to a “newco”, Terzakis has confirmed to ch-aviation. It’s a process that’s supposed to ensure creditors receive as much of the money they are owed as possible. With the asset transfer overseen by a court-appointed administrator, the carrier will be looking to secure a buyer before the four-month deadline, but Belgian media are carrying reports that the sale will happen within six weeks.
