Spanair Files For Bankruptcy After Qatar Airways Pulls Out Of Rescue Deal


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Spanair Files For Bankruptcy After Qatar Airways Pulls Out Of Rescue Deal

By Shane Nolan

January 29, 2012 - Spanair’s Board of Directors on Friday decided to file for bankruptcy. On Wednesday, the company was in an "Emergency Financial Situation." The Catalonian government approved a €10.5 million loan plan in order to save it. Revenue improved and the company was cutting costs. 

However on Friday, the airline ceased operations after a rescue deal with Qatar Airways fell through and the government has declined to inject further cash into the airline. 

Spanair is a Spanish airline, with its head office in the Spanair Building in L'Hospitalet de Llobregat, near Barcelona. It was, until 2009, a subsidiary of Scandinavian Airlines, which held slightly under 20% of the company.

Spanair provided a scheduled passenger network within Spain and Europe, with an extension to West Africa. Worldwide charters were also flown for tour companies. Its main hub was Barcelona El Prat Airport, with focus cities at Madrid-Barajas Airport and Palma de Mallorca Airport. The airline had 3,161 employees. 

SAS ownership in Spanair is currently 10,9%, but the value of these shares has already been written down and are booked at 0 value. The write down will affect the SAS Group’s result as a non-recurring item and equity negatively by SEK 1.7 billion in total. As informed earlier, the effect on the SAS Group’s liquid assets is estimated to be limited to MSEK 200-300. 

SAS Group will follow customary procedures as a creditor in the upcoming bankruptcy process. As reported as of the third quarter, SAS has a financial preparedness of SEK 10.6 billion so the event will have a limited effect on SAS liquidity. SAS will assist passengers to the extent practically possible. 

The airline was established in December 1986 and began operations in March 1988. It was set up as a joint venture between Scandinavian Airlines and Viajes Marsans, and began operations with European charters. Long-haul flights to the United States, Mexico and the Dominican Republic were launched in 1991, followed by domestic scheduled flights in March 1994. The airline flew long-haul flights with Boeing 767-300ER aircraft to Washington and Buenos Aires in the late 1990s. Spanair joined Star Alliance on 1 May 2003.

The company was 94% owned by the SAS Group. SAS announced in a press release 13 June 2007 that it would sell its shares in Spanair. The divestment was canceled on 19 June 2008 due to SAS not being able to sell for a price that it considered to "reflect the underlying value in Spanair." On 30 January 2009, however, a one euro bid from group of investors from Catalonia, led by the Consorci de Turisme de Barcelona and Catalana d'Inciatives, was later accepted, whereupon SAS became a minority shareholder.
A report in The Times on the day of the Madrid crash suggests that staff were threatening strike action due to concerns about the company's viability. In 2009 the airline asked for public input on a new logo, with a winner being officially confirmed on 13 May 2009. In the beginning of June 2009, Spanair began applying the new corporate identity to their aircraft.

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