Report: Air Belgium On The Brink Of Liquidation

Bad things seem to happen in threes. Primera Air went out of business a couple of weeks ago, Cobalt Air went out of business yesterday, and it looks like we may now see a third European airline go out of business.

Air Belgium is the Charleroi-based airline that began flying between Charleroi and Hong Kong in early June. Their strategy was to operate a hub in Charleroi and fly to several points in China. They started with Hong Kong, but their plan was to eventually add destinations in mainland China.

flew Air Belgium from Charleroi to Hong Kong and had a lovely flight, though I still found their business model to be whack from day one.

Just under a month ago Air Belgium announced that they’d discontinue scheduled flights between Charleroi and Hong Kong. They claimed that they were “temporarily pausing” the flight, and that it would resume next year. They said that in the meantime they’d move forward with launching more flights to mainland China.

In the meantime the airline was going to continue operating charter flights on behalf of other airlines, given that they have four A340-300s, and there is a longhaul aircraft shortage at the moment due to the 787 engine issues.

Well, it looks like there’s some bad news for Air Belgium. L’Echo is reporting that the company is having an emergency general meeting this afternoon to decide whether to dissolve or not. Ironically just yesterday Air Belgium and HNCA had a signing ceremony, presumably regarding upcoming service to mainland China.

The fact that this airline was ever launched to begin with is mind-blowing. However, I can’t help but be a bit surprised that they’re not able to make things work right now, given how much demand there is for leased longhaul aircraft.

The airline has four A340s, but at the moment only one of them is being leased out. It’s being operated on behalf of British Airways on their flights between London Heathrow and Abu Dhabi.

I’m not sure what exactly is going on, though. Clearly the business model doesn’t make much sense, but I don’t get why they aren’t able to find leases for all four of their planes. Presumably they’re making a mild profit leasing out one plane, but that hardly covers the cost of the other A340s that are just sitting around.

I’ll be curious to see what comes of this afternoon’s meeting. I should also probably follow up regarding the refund for my return ticket from Hong Kong to Charleroi…

Comments

  1. Sadly, you will probably never see that money…or after liquidation and some settlements paid out to others (and attorney fees) maybe two cents on the dollar.

    Ben, peaking of refunds, do you know what ever happened to the BA Fuel Surcharge Class Action? I opted for a refund and it said my amount was like $1300.00. The site gives no information that I can dissect and have heard nothing since this thing was supposedly completed during the summer

  2. I’m just happy I got to see Air Belgium before it disappears and I love that livery. Still it looks really wierd an Air Belgium A340 at Heathrow Terminal 5.

  3. Oh, and I can’t believe giving free flights to all those teenage HK bloggers to show off the business class service didn’t result in a huge passenger increase!

  4. In all seriousness, you do need to get on top of that refund and actively file a charge-back with the credit card company. I once got stung getting a ticket 8 months out that the credit card refused to refund because my claim was more than 6 months from purchase.

  5. I enjoyed the trip because the comfort in it was amazing and if someone asked me i will surely suggest them to just go once with it and have the best experience!!

  6. @Stuart – it could still be a while before you see any money from BA. The final approval process and any appeals can take a long time. Payments are scheduled only after the settlement is truly final (meaning no further appeals are possible).

  7. Is Air Belgium the airline that flies directly from Brussels to Kigali? I am planning to go to Rwanda next year and considered that flight. Is it not safe to book now?

  8. JJJ – I’m going to take a wild stab in the dark and guess they’re called Air Belgium because they’re an AIRline based in BELGIUM.

  9. Cobalt had Chinese money behind it and I believe that Air Belgium had Chinese money also .
    What does this tell me ?
    1. No experience by Chinese investors in running airlines in Europe ( just invest for profit ????)
    2. Clamp down by China Government Authorities (State Administration for Exchange Control known as SAFE ) on the shareholders sending more money from China to keep airlines going . (What do they know that we do not ???)
    3, “”Running an airline ” is the reason for sending money out of China , but has anyone audited the airlines accounts to check where all the shareholders capital went ? Was it spent on running the airline or hived off into subsidiary companies bank accounts, to await calm and then be used by shareholders for other purposes ?
    4. Money laundering has been mentioned by readers here in the past , now it looks real .

  10. Well, we all saw it coming. Supposedly, that is, apart from the owners….h
    They’re obviously either idiots or criminals. Or both.

  11. It’s no coincidence that Belgium hosts both the EU and NATO HQs. We know pedophilia is key in managing the controlled delegation of power, and for Belgium it has always been the national sport. You only get promotion if those above you have a hold over you. Did you ever wonder why so few of the current European PMs are married – practically none of them. So this airline project is simply someone’s ego going into absurd overdrive. Maybe the Chinese promised loads of traffic and Mr Ego believed them.

Leave a Reply

Your email address will not be published. Required fields are marked *