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A bumpy ride ahead for airlines

September has not been a good month for airlines. Following confirmation on 23 September that Thomas Cook would close, France has also lost two; XL Airways, a France-based low-cost carrier, went into administration on 12 September due to its own financial difficulties.

Above - Maxime (Wikimedia Commons)

XL carried some 730,000 passengers to several U.S. cities as well as to the Caribbean and Reunion, an overseas region of France in the Indian Ocean, and to China. Indicating that the carrier needed about €35 million to continue operating, over the last year, the airline’s management unsuccessfully negotiated with potential buyers, including Air France, which rebuffed overtures for XL to become its long-haul, low-cost arm.

Following this, Aigle Azur, France’s second-largest airline behind flag carrier Air France, has become the latest casualty of rising fuel prices and cut-throat competition, entering liquidation on 27 September after unsuccessful bids for the carrier. Based at Paris Charles de Gaulle and Orly airports, the airline filed for bankruptcy and was placed in receivership on 2 September, with all flights suspended four days later. The airline carried about 1.9 million passengers in 2018, operating scheduled services with an all-leased fleet of aircraft as well as charter and air cargo services. Initially, expressions of interest in acquiring Aigle Azur were lodged by fourteen entities, but the bankruptcy court eventually ruled that “no durable solution has been proposed by the bidders.”

Left - Ken Fielding (Wikimedia Commons)

France’s minister of economy and finance Bruno Le Maire is holding Norwegian Air Shuttle partly responsible for XL Airways' bankruptcy, claiming the low-cost carrier received illegal state aid from the Norwegian government. “Norwegian Air is undercutting prices while in debt and receiving public funding from Norway,” Le Maire said during a television debate. “That’s something I cannot accept because competition rules should be the same for everyone. We cannot accept it in Europe; we cannot accept it either from Norway,” he said. He vowed he would write to the European Commission “to tell them to put it right.”