Monday, January 30, 2012

Spanair Files for Bankruptcy After Abrupt Stopping of Flights, Stranding Passengers

Earlier today (January 30) Spanish carrier Spanair filed for voluntary bankruptcy, three days after abruptly stopping all flights and stranding tens of thousands of passengers. In court documents filed in the Barcelona commercial court, the carrier declared liabilities of more than 300 million euros (US$393 million). The airline is also expected to lodge a labor force adjustment plan affecting all or some of its 2,400 staff before laying off employees.

At least 37,000 passengers' flights had so far been affected by Spanair's decision to ground all operations late Friday (January 27). Long lines of grounded and angry airline passengers formed at airline counters nationwide over the weekend.

It is the third Spanish airline to go under during the past five years after Air Madrid in 2006 and Air Comet in 2009.

COMMENT: Spanair serviced mostly Spain's domestic market and medium-haul routes to other destinations in Europe and North Africa where it faced stiff competition from low-cost carriers such as Ryanair and Easyjet. The airline, which was founded in 1986, tried to team up with Qatar Airways, but the merger fell through.

In a separate development, the Spanish government has said it is taking action against Spanair for breaching rules on continuity of services and passengers' rights in the course of its sudden shutdown, and may fine it up to nine million euros.

Flag carrier Iberia has said that it will pick up the passenger slack on routes previously serviced by Spanair.

In June 2011, a Spanish judge indicted three managers of Spanair for "negligent homicide" over a 2008 air crash that killed 154 people at Madrid-Barajas Airport. The MC-82 bound for Las Palmas, in Spain's Canary Islands, crashed on August 20, 2008. Only 18 of the 172 people aboard survived Spain's deadliest air accident in 25 years. Investigators have said that wing flaps were not extended properly for takeoff when the jet careered off the runway and broke up in flames.

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