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The biggest airline failures of all time

Where does Monarch rank?

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The biggest airline failures of all time – where does Monarch rank?

It is by far the biggest UK airline failure in history. Until today, Monarch served 43 destinations with a fleet of 35 aircraft. It flew 5.43 million passengers last year, making it Europe’s 26th largest airline (it carried more than 7 million in 2014), and employed 3,500 people. How does its failure compare with other major British airline bankruptcies?

 

FlyGlobespan

2009

The last UK carrier to cease trading was Citywing, a virtual airline that operated under charter until March 2017, with a base at Isle of Man Airport, but the last major failure was FlyGlobespan, back in 2009. Based in Edinburgh, it had a fleet of nine aircraft, serving 24 destinations, and flew just over 2 million annual passengers at its height. When it went under, it had just 4,400 customers overseas, and 117,000 forward bookings – small fry compared to Monarch.

The last major UK airline failure was FlyGlobespan, back in 2009
2008

In September 2008, XL Airways ceased trading after 14 years in business. It had a fleet of 18 aircraft serving more than 50 destinations, and carried 2.3 million passengers in 2007, but it collapsed – along with the other brands in the XL Leisure group – due to rising fuel prices (crude oil hit an all-time record of $147 a barrel that summer) and a growing global financial crisis. Around 85,000 holidaymakers were stuck overseas, and a further 200,000 had their bookings cancelled.

Around 85,000 holidaymakers were stuck overseas when XL went under
Zoom Airlines

2008

Founded in 2002, Zoom largely operated flights between Britain and North America with a small fleet of three aircraft. Unable to pay its fuel bills, it ceased trading in August 2008, leaving 900 passengers stranded on either side of the Atlantic. Its failure left 4,500 stranded abroad, while 60,000 forward bookings were lost.

Silverjet

2008

Business-class carrier launched in 2006, billed as the “world’s first carbon-neutral airline”. Based in Luton, offering routes to Newark and Dubai, it only survived for two years, and its fleet never grew beyond three aircraft.

Air Wales

2006

With a fleet of five, Air Wales flew scheduled regional services within the UK, as well as to Ireland, Belgium and France. It spent six years in the sky before folding due to “spiralling costs” and “aggressive competition” from larger low-cost airlines.

Debonair

1999

Worthy of mention if only for its terrific name, Debonair operated out of London Luton for three years, flying to Newcastle upon Tyne, Copenhagen, Mönchengladbach, Munich, Barcelona and Nice. It tried to position itself as an upmarket budget airline (offering cheap flights but with free snacks), a business model that ultimately failed.

Capital Airlines

1990

The self-styled “Yorkshire International Airline” was the first to be based at Leeds Bradford Airport, but ceased trading after just three years in the sky. Its MD, Adrian Thompson, went on to work at Air Wales.

Laker Airways

1982

British entrepreneur Sir Freddie Laker pioneered cheap air travel with his Skytrain to the United States in 1977. His first London-New York flight was a third the cost of estabished carriers. The British public, keen to enjoy package holidays abroad, loved the airline. Rivals did not and actively worked to put it out of business. They succeeded. In February 1982, Laker Airways and Skytrain collapsed with debts of £264m, but not without a fight. The liquidators took brought an anti-trust action against 10 major airlines, seeking billion in damages. The action threatened BA’s privatisation and eventually was settled out of court for £35m – Sir Freddie got £6m. At its height Laker Airways had 20 aircraft.

Passengers learn that Laker Airways has failed
How does Monarch compare with global airline failures?

The biggest non-UK airline to cease trading in recent years was Transaero, a Russian carrier with a fleet of 97 and 156 points on its route map. It carried 13.2 million passengers in 2014 but went under the following year after accumulating 3.9bn euros of debt.

Transaero carried 13.2 million passengers in 2014 but went under the following year
Other recent failures include MAXjet, a US carrier that flew to Stansted, but ceased trading in 2007; Eos Airlines, which operated daily flights between London Stansted and New York but declared bankruptcy in April 2008; Oasis Hong Kong, which operated services from its base in Hong Kong to London Gatwick and Vancouver between February 2005 and April 2008; and SkyEurope, a Slovakian no-frills carrier, founded in 2001, which expanded to a fleet of 13 aircraft serving 30 destinations before its failure in 2009.

Donald Trump also tried his hand at aviation. Trump Shuttle was launched in 1989 with a pledge to create “the best transportation system of any kind in the entire world.” He snapped up a fleet of ageing Boeing 727s from a struggling Eastern Air Lines, along with many of its disgruntled staff, and launched flights from New York to Boston and Washington D.C. “We took old 727s and spent a huge amount of money stripping them down to the frame and refurbishing them with chrome seat belts, maple bulkheads and faux marble bathrooms,” Bruce Nobles, president of the Trump Shuttle from October 1988 until June 1990, told The Globe and Mail in a 2011 interview. “It was a problem: we spent too much money on the airplanes.”

Nobles claims Trump paid $365m for the aircraft and landing slots, borrowing $380m from a consortium of banks and putting in around $20m of his own cash. Despite grabbing a decent market share, it could not thrive in a tricky economic climate while saddled with so much debt. It never turned a profit and in September 1990 the loans were defaulted and ownership of the airline passed to the banks, who eventually sold it to the US Air Group.  “It worked out well for me,” was Trump’s assessment in an interview with The Street. “I ran an airline for a couple of years and made a couple of bucks. The airline business is a tough business, [but] I did great with it.”

 

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