SkyEurope collapse leaves thousands of fliers stranded
Slovakian budget carrier is latest scalp claimed by airline industry downturn
Wednesday 02 September 2009
SkyEurope Airlines, the Slovakian discount carrier, lost its battle against bankruptcy yesterday, leaving travellers stranded in airports from Manchester to Bratislava.
A raft of budget rivals, including easyJet and Ryanair, rushed to offer cheap "rescue" tickets to passengers stranded abroad after the company grounded its planes.
SkyEurope's failure comes as no surprise to industry-watchers. The company started in 2002 and grew quickly – boosted by the expansion of the EU in 2004. It raised €120m (£106m) when it listed on the Viennese stock exchange the following year, but rapid growth never turned to profits.
New management, brought in two years ago, backed the airline out of Polish and Hungarian markets to focus on Vienna, Prague and Bratislava, but to no avail. Last year, the group's losses ballooned to €62m and the fleet was cut from 15 aircraft to just five.
With the global industry struggling with the toxic combination of volatile fuel prices and crushed economic confidence, SkyEurope made little progress. The first quarter of 2009 saw the carrier slip another €15m into the red and the group went into bankruptcy protection in June, just weeks before the departure of Jason Bitter, the chief executive.
Last month SkyEurope was offered a lifeline, in the shape of a €16.5m investment offer from Austria's Focus Equity. But the money was contingent on the successful conclusion of a major restructuring of the company, and SkyEurope went bankrupt too quickly to comply. By August, the carrier's flights were banned by Vienna for non-payments of bills, with Prague and Bratislava following suit last week.
The Slovakian company joins a growing list of airlines brought down by the global downturn. More than 80 have gone bankrupt since the start of 2008. And while SkyEurope may be the first major collapse in Europe this year, it is unlikely to be the last.
SkyEurope was popular in the UK for weekend trips from London Luton and Manchester. Some passengers with tickets booked on SkyEurope flights may be entitled to a refund from their credit or debit card providers. The Atol scheme will also protect most travellers who booked flights through a travel agency as part of a package, although it may not cover late-bookers.
Abta, the travel association, said the situation reinforces its calls to the EU and UK government to make it a legal requirement on airlines to provide financial protection for passengers.
Mark Tanzer, the chief executive of Abta, said: "This airline failure in a tough economic climate, along with several others last year, highlights the need for urgent action to plug this gaping hole in customer financial protection."
The Independent travel offers: Discover a world of inspiring destinations
- 1 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 2 What supermodels really think about posing in the nude
- 3 People all over the world are getting semicolon tattoos to draw attention to mental health
- 4 Black teen in critical condition after store employee 'shoots him for stealing 79-cent pack of cookies'
- 5 Chris Moyles reportedly set to make radio comeback with new breakfast show on XFM
The 50 Best weekend retreats
Are plastic planes the future of flight? Heathrow expansion reopens debate over aviation's effects on the environment
Inside Travel: Greece 2015 Q&A - should we cancel our Greek holiday? Are our flights safe? And what will we be spending there?
The most powerful passports in the world
The 10 Best lightweight luggage
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
£15000 - £25000 per annum: Recruitment Genius: To support their continued grow...
£33000 - £38000 per annum: Recruitment Genius: A global player and world leade...
£18000 - £24000 per annum: Recruitment Genius: If you are friendly, sociable, ...
£22300 per annum: Recruitment Genius: This museum group is looking for a Payro...