A troubling year for the aviation sector as several biggest airline companies go bankrupt
2019 has been a not-so-good year for aviation. If you were to look for the industry that underwent a global slowdown, it’s the airline sector. Several companies from the different parts of the globe had collapsed and gone out of the said business. For those well-established airline companies from around the globe, the revenue continues to knock on their door and the passenger loads are still tight and strong.
The competition for low-cost carriers is getting stronger than ever which results in the cannibalization of ticket prices globally wherein the greatest factor is the strong price sensitivity. Given that scenario, airlines can fail due to their small target market and its movements. Of course, running an airline company is not an easy endeavor. Several expenses come in like the fuel wages and maintenance to fleet renewal, to name a few. If talking about the failure rate, regardless if you’re a big or small carrier, is relatively higher if it’s to be compared to other sectors.
Earlier this week we witness the last-minute cash in of the money required to save Hong Kong Airlines from being bankrupt. Unfortunately, other carriers already collapsed which include Iceland’s WOW, Jet Airways in India, and Thomas Cook in the United Kingdom, just this year. In the United States, various airline companies from Northwest to Continental have been absorbed by Delta Airlines and United Airlines respectively. This was undertaken to ensure market survival and growth. Still, there are also instances wherein several high-profile major airline companies just haven’t made it. Some of the biggest airline companies to ever go bust include PanAm, Trans World Airlines, Laker Airways Skytrain, Ansett Australia, Braniff International, Eastern Air Lines, Interflug, Transaero, Monarch and Thomas Cook Airlines, Sabena, Mexicana, and even Air Berlin.
In 1991, PanAm failed in the business. This airline company coined to be the mass travel in the golden years. It was then followed by Trans World Airlines in 1998. On the other hand, the failure of Lakers Airways Skytrain marks the biggest corporate failure ever in the United Kingdom in 1982. In the same year, Braniff International also failed in the business. For Ansett Australia, it could no longer afford to stay in the business and ended in September 2001 the same goes for the Monarch and Thomas Cook Airlines. Inteflug used to be Germany’s second major airline before it ceased its operations in 1991. Due to its debt, Transaero ceased its operations in 2015. Sabena had been operating for almost 78 years until it can’t find further investment in 2001. Mexicana Airlines also underwent such an event. Lastly, Air Berlin also exit the business with its staggering losses of $900 million a year for two years.