French airline ceases operations
French carrier, XL Airways, has announced it will be suspending all flight operations until the end of October 3. XL Airways’ latest announcement comes as the airline struggles to fight off imminent liquidation.
In a statement, XL Airways said, “We apologise for the inconvenience this situation may have caused our valuable customers. Our teams are fully committed on working fully towards delivering our customers with our service”.
The announcement will come as no surprise to anyone, who has been keeping an eye on XL Airways’ recent financial woes.
At the end of August, it was reported that XL Airways was looking for potential buyers to take on the business, as it needed significant investment to stay afloat. Unfortunately, nothing came of these negotiations. On September 19, the carrier announced it was suspending ticket sales and said it may have to have cancel some flights in order to protect itself from further accumulation of debt.
Last week, reports emerged that XL Airways was reaching out to Air France in hopes of securing a last-ditch rescue deal. In total, XL Airways asked for $38.6 million in order to continue operations, but Air France did not offer assistance.
Now, XL Airways is beginning its death throes, as it exhausts its final lifelines for survival.Over the past year, smaller European airlines have been dropping like flies. Although it’s not quite done yet, XL Airways is the second French airline to suffer bankruptcy in September.
It joins Aigle Azur, which ceased operations on September 6, and was doomed to liquidation by France’s Commercial Court on Friday.British tour operator Thomas Cook Group was another of September’s airline casualties, going into liquidation on September 23. It left 21,000 employees without jobs worldwide, as well as 600,000 customers stranded overseas.
Low barriers to entry are thought to be one of the main factors, which have led to so many airlines going bust recently.It is much easier and cheaper to start up and run an airline than it once was. This has led to increased competition, which some carriers simply have not been able to keep up with.
French Finance Minister, Bruno Le Maire, blamed one particular low-cost European airline for undercutting prices, making the position of carriers like XL Airways untenable.The first suspect that may come to mind might be Ryanair. However, it is in fact Norwegian Air that Le Maire blamed for XL Airways’ demise on French television.
“Norwegian Air is undercutting prices while in debt and receiving public funding from Norway,” he said.According to France, Norwegian Air has been getting aid from the Norwegian government to stay afloat. Without this aid, Le Maire says Norwegian Air would be operating at a significant loss.Consequently, France will be launching an official complaint to the European Commission to raise its concerns over Norwegian Air’s uncompetitive business practices.
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