Another European airline collapses, while Peruvian carrier suspends all flights

Adria Airways is the latest in a line of European airlines to collapse in the last year, while the situation for a Peruvian carrier is almost as dire.

On 30 September, Adria Airways – which accounted for 59.7 per cent of international seat capacity to Slovenia – filed for bankruptcy, joining the likes of Iceland’s Wow Air, and France’s Aigle Azur – which ceased operations after a French court rejected financial rescue offers – to collapse in 2019.

The loss of Adria Airways has seen Slovenia lose direct flight connections with two dozen countries, including key markets in Czech Republic, Spain and Switzerland, according to travel analytics firm ForwardKeys.

While in Austria, Germany and France, the impact will also continue to be felt: Adria Airways accounted for 99.6 per cent, 87.3 per cent and 50.8 per cent of seat capacity on flights to Slovenia from these countries, respectively.

ForwardKeys said it expects other airlines to fill the gap left by Adria Airways but added how long it takes to get back to the previous level “is anyone’s guess”.

“Slovenia, and its vibrant capital Ljubljana, remain accessible and well worth a visit; however, if you were counting on Adria Airways to get you there quickly, you must now allow more time,” Olivier Ponti, VP Insights, ForwardKeys, said.

Meanwhile, Peru’s second largest carrier, Peruvian Airlines, is in an almost equally dire position after announcing the suspension of all flights leaving Lima until further notice due to “a lack of liquidity”.

Peruvian’s suspension of operations comes after the airline’s accounts were frozen by government authorities due to “a valuation difference” in the temporary importation of two commercial aircraft.

According to multiple reports the bank’s action, which Peruvian described as “coercive”, prevented the airline from paying fuel charges and forced it to stop flying for half a day.

This then created “distrust” with travel agencies that significantly lowered Peruvian’s sales, creating a situation “from which we could not recover”, the airline said in a statement. Peruvian is currently looking for new investors in order to “refloat the company”.

Adria and Peruvian join several other airlines to have collapsed in the last year, including India’s Jet Airways, Wow Air, Aigle Azur and British travel group Thomas Cook, which owned its own airline.

The International Air Transport Association’s (IATA) chief executive officer Alexandre de Juniac said in September the collapse of several European carriers over the last 18 months showed the industry is “fragile”.

“We are not a high margin industry, we are exposed to a lot of risk,” he said, as reported by Reuters.

De Juniac’s comments came after the IATA announced in June a downgrade of its 2019 outlook for the global air transport industry as a result of rising fuel prices and “a substantial weakening of world trade”.