EOS Airlines Files For Bankruptcy Protection
In a move which is more of a delaying tactic than an attempt to put together a rescue package, US business class airline EOS has filed for bankruptcy protection in the US after an attempt to raise vital funding fell of deaf ears. This is the latest in a long line of smaller airlines which have hit the buffers of late and it surely will not be the last.
EOS Airlines was something of a phenomenon in the industry, affording passengers extensive leg room on their flights and top class services. In theory their luxury planes could have coped with up to 200 passengers, but they were renovated so that their 48 “guests” would fly in luxury. It seems that a mixture of higher fuel costs, a slowing of the business market and the credit crunch have assigned another chapter in the airline industry to the record books. So what next?
While there were few airlines as generous with space and luxury as EOS Airlines, market conditions have got the better of them. However, you can guarantee that they will not be last to be grounded forever with more and more small US airlines seriously considering bankruptcy protection as an option to give themselves breathing space.
However, while the bankruptcy laws of the US are there to protect companies and give them time to consider their options, there is little likelihood of any “white knights” appearing for the companies that have gone under and the ones currently struggling. Those airline companies with money are looking to shore up their own operations and venture capitalists have never been too keen on the airline industry where union interference and a dependence on the price of oil can often over shadow any spectacular business skills.
Even though the number of grounded airlines is growing by the week, we are nowhere near the bottom of the cycle and more bad news is sure to follow over the coming months.