Air Belgium this week announced that it would be restructuring the business, and therefore prioritising the successful aspects of its business: ACMI & Cargo.
Due to the following external pressures, the carrier is beginning this restructuring as soon as possible:
- Ukraine War.
- COVID-19.
- Soaring fuel prices.
- Inflation.
- Falling consumer purchasing power.
Without further ado, let’s get into it…
Air Belgium Restructuring: Prioritising Successful Aspects…
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In its statement, Air Belgium said that they would seek to do the following three things in the midst of this restructure:
- Concentrate on the two profitable lines of business that offer growth prospects: The activities of cargo and ACMI (Aircraft, Crew, Maintenance and Insurance, or wet lease), i.e. the leasing of aircraft between airlines for passenger and cargo flights, constitute two profitable lines of business with growth prospects.
- Discontinue the Passenger business: despite the many investments by Air Belgium in recent years and the strengthening of commercial initiatives, the Passenger business is still unprofitable. After numerous studies, Air Belgium’s Board of Directors reached the conclusion that turning a profit on this front would require substantial investments in addition to those already made in recent years, which has not been possible.
- Initiate judicial reorganisation proceedings by way of amicable agreement to ensure the company’s long-term viability and growth and to give it time to reorganise internally around these two segments.
On point #2, the airline has said that flights scheduled before October 3 will be operated and return flights would be handled by Air Belgium, either directly or through airlines.
Anything after that point will be cancelled and refunds will be sent to those affected by this restructuring. They ended their statement with this quote:
“Air Belgium is deeply sorry to announce the discontinuation of its Passenger business at such short notice.”
“All options for maintaining this activity or continuing flights after 3 October were examined, but the financial situation did not allow this.”
Looking ahead, all eyes will be on Air Belgium to see if it can get itself through to the other side, and be a functioning & profitable business.
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