Air Belgium announced yesterday to cease its activity passenger transport own, “chronically unprofitable“, to refocus exclusively on the air freight and thecharter.
The restructuring of its activity can be explained by external events such as the coronavirus pandemic, the war in Ukraine, the surge in fuel prices and even inflation, explains the Belgian airline. In March, faced with the impossibility of passing on the rise in fixed cost prices to ticket prices, it canceled flights to unprofitable destinations such as the Caribbean and the French West Indies. Air Belgium then focused its activities on South Africa and Mauritius, while the capacity of the released aircraft was allocated to charter and ACMI activities (chartering of aircraft with crew to other airlines).
These obstacles have “severely affected” the post-Covid recovery, the profitability of the passenger activity and the airline’s cash flow, underlines Air Belgium. “If Air Belgium’s budget forecasts anticipated a return to profitability in the fall of 2023, the financial difficulties of the past, linked to the current uncertain and difficult environment, are pushing Air Belgium to change strategy.“
The board of directors of Air Belgium also filed a judicial reorganization procedure with the commercial court by amicable agreement, in order to deal with its debt, return to profitability and allow it to reorganize. The court will consider the request in the coming days. In the event of a green light, the company will be able to negotiate agreements with its creditors to reduce its debt.
For the customers who have already purchased a ticket, flights scheduled before October 3 will be operated and return flights will be covered by Air Belgium, either directly or through other airlines. Those scheduled after this date and already paid for will be canceled and refunded. Around 20,000 travelers are affected by the end of passenger flights to South Africa and Mauritius after October 3.
For employees linked to passenger activity, management promises to gradually reassign them to other Air Belgium activities.