More than 160 airlines have gone belly up since 2019 and during the scourge of the pandemic. This is reflected in the latest data from the International Air Transport Association (IATA), with 59 bankruptcies in the pre-covid period, 53 in 2020, 35 in 2021 and 15 in 2022.
Among the missing is the business charter company VolDirect, Atlantis Armenian Airlines (Armenia), Air Namibia, Air Burundi, Embraer Great Dane Airlines (Denmark), Stobart Air (Ireland), Thomas Cook Airlines Balearics (Spain), Flybe (UK), Flyr (Norway), Ernest Airlines (Italy).
“If you look at the number of airlines that have gone out of business, it’s staggering. There have been major impacts across a large number of airlines,” Steve Ehrlich, chairman of Pilots Together, told CNN. “The pandemic exposed some of the weaknesses in airlines that we might not have seen for some time.” Pilots Together is a charity founded during the pandemic to help pilots who had been laid off.
The trend is clearly downward, but it has highlighted the existence of outdated rules for the protection of passengers and intermediaries. Agencies have been calling for years for rules to ensure that the only one to blame for a bankruptcy is the airline itself, and that no other players involved in the sale and purchase of travel are left with an unpaid bill.
If you look at the number of airlines that have gone out of business, it’s staggering.
Steve Ehrlich, chairman of Pilots Together
Other associations such as EU Travel Tech have not ceased their efforts in this regard. On numerous occasions they have called on the European Commission to force airlines to offer financial guarantees to cover their liabilities to passengers in the event of insolvency. They recently pointed out that “neither customers nor travel agencies should be held responsible for the mismanagement of airlines”.
According to ForwardKeys, a company that analyzes data from the International Air Transport Association ticketing database, bookings are still down by 22% globally for the first quarter of 2023, compared to 2019. The Caribbean is 3% down on 2019 bookings, while Asia Pacific is lagging at 46% down. Other figures include the Middle East (down 5%), Americas (9%), Europe (15%) and Africa (18%).
In the last few years, two situations were often talked about in the tourism industry. The first was the disappearance of Thomas Cook, which left thousands of hotels, agencies, passengers and a long etcetera in the lurch, unable to recover their money. The second was the pandemic, a time when suppliers were unable to reimburse for flights cancelled due to the confinements, forcing many companies to put money out of pocket to satisfy consumers.
The pandemic exposed some of the weaknesses in airlines that we might not have seen for some time.
Steve Ehrlich, chairman of Pilots Together
IATA pledged to finally address this problem. The powerful airline lobby, which until now had ignored the issue despite constant complaints from agency associations, had set up a working group to look into the matter.
Members of the association are holding meetings with airlines with the aim of improving the risk management framework for both end customers and travel agencies. However, the talks are still at an early stage and it remains to be seen whether they will come to fruition.
According to some experts, bankruptcies are part of a general trend of consolidation. Regional airlines are merging under the same umbrella organization. In Europe, for instance, Aer Lingus, British Airways, Iberia, Level and Vueling are already all owned by IAG. Regional airports have also suffered in the aftermath of the pandemic as many airlines have chosen to focus on larger hubs to accelerate recovery.
