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Business

SkyEurope bankruptcy leaves thousands of passengers stranded

Text by NEWS WIRES

Latest update : 2009-09-02

Slovakia-based low-cost airline SkyEurope announced it had filed for bankruptcy Tuesday, causing all of its flights to be cancelled. Thousands of passengers found themselves stranded across Europe, as competitors vied for their business.

AFP - A number of airlines were queuing up Tuesday to offer "rescue fares" to thousands of passengers stranded by the collapse of the Slovakian low-cost carrier SkyEurope.

In Austria, Austrian Airlines and FlyNiki both offered to fly passengers home for a one-off rescue fare and they were quickly matched by easyJet in Britain and Irish low cost carrier Ryanair.

Austrian Airlines, itself being taken over by German giant Lufthansa, said it would fly SkyEurope passengers home from those destinations it also served for 150 euros (215 dollars).

FlyNiki, which is owned by former racing driver Niki Lauda, priced its rescue far at 99 euros. EasyJet's was 40 pounds (45 euros, 65 dollars) while Ryanair's was the cheapest so far at just 25 pounds.

Lauda said FlyNiki's partner airline, Air Berlin, was drawing up a similar offer.

Bratislava-based SkyEurope, which declared insolvency in June, announced late Monday that its court-appointed trustee had decided that a bankruptcy application was the only way forward for the group owing to "the lack of sufficient interim funding to finance ongoing operations."

All flights were "suspended with immediate effect," the statement said.

That left thousands of SkyEurope passengers stranded across Europe, according to airline spokesman Roland Schranz, who did not give an exact figure.

The carrier's hands were tied when it came to negotiating deals with other airlines to fly those passengers back, Schranz told the Austrian news agency APA.

"An airline which has filed for bankruptcy can't negotiate any deals," he said, declining to estimate exactly how many people were affected.

SkyEurope's shares were suspended from trading on the Vienna stock exchange "until further notice."

The bankruptcy came soon after Ruzyne Prague airport said it would halt all SkyEurope flights after the airline failed to pay its debts.

In mid-August, Vienna airport halted SkyEurope flights for the same reason.

In July, SkyEurope said it had found an investor in the form of the Austrian group FOCUS Equity, which was supposed to invest 16.5 million euros, conditional on a successful restructuring process.

The company, set up in 2001 by mainly Austrian investors, launched ticket sales for the winter season in July after adding two new Boeing 737-300 aircraft to its fleet.

The carrier announced earlier this year that its business had been badly hit by the global economic slump and that it had had to reduce its fleet to just five planes from the 15 Boeing 737s it operated in late-2008.

SkyEurope, with bases in Bratislava, Vienna, Prague and the eastern Slovak city of Kosice, never posted a profit in the six years of its existence.

Date created : 2009-09-02

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