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Airline Bankruptcies Stress Test European Carriers

Fall of Air Berlin and Monarch create problems for flyers across the continent.

The collapse of airline schedules do not just have a financial cost in Europe – they also affect flyers best-laid plans and pocketbooks. The New York Times reports the recent wave of aviation shakeups across the continent could be signs of a changing marketplace, with more consolidation and new market plans coming.

This year, three major European carriers have fallen into bankruptcy, with two going out of business altogether. Despite investments from Middle East carrier Etihad, both Alitalia and Air Berlin filed for bankruptcy in May and August, respectively. While Alitalia continued operations, Air Berlin will shut down for good, with all operations ending on October 28, 2017. Two months after the Air Berlin announcement, Monarch Airlines abruptly declared bankruptcy, grounding all flights and stranding over 400,000 passengers.

Other situations, including changing regulations, forced Ryanair to ground a number of flights into 2018. As a result, over 30 routes and nearly 50 flights per day have been cancelled, affecting hundreds of low-cost flyers, while flight attendants plan their own strike.

With airlines canceling flights and passengers scrambling to get new tickets, will this be the new normal in Europe? Aviation experts say it is not the beginning of the end – but it is the end of the beginning for low-cost carriers.

“Passengers have had a really good run for a long time with incredibly cheap tickets,” Andrew Charlton, managing director of consultant group Aviation Advocacy, told the newspaper. However, he cautioned: “Europe’s got too many airlines.”

As a result, while some low-cost carriers may not be coming back, other airlines could expand. In turn, more legacy carriers could offer new routes aboard low-cost subsidiaries, similar to IAG with Vueling and Lufthansa with Germanwings.

In the near future, Brexit will become a topic for airlines to navigate as well. With Britain set to leave the E.U., new discussions will be held over aviation – once again forcing more change over European skies.

[Photo: Shutterstock]

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