It may be a rare sight, but people do save airlines from going out of business entirely. When people try to do this, it often fails miserably, and ends up being laughed at in the media. But sometimes it does succeed. So why do people save airlines?
Some people save airlines due to many reasons. Some of these people make their intentions public, stating that they are interested in the business, or are looking to expand their own. Others, have kept their reasons more reserved. Whether it is a personal reason, or a sentimental reason.
Reasons people try to save airlines
Beat the consolidation, consolidation in the airline industry is well known and well documented. Some people have the belief that they can defeat the consolidation in the airline industry. Instead of starting their own airline from scratch, they choose to save airlines. This allows them to forgo the experience of applying for everything and minimizes the chance they will be banned.
Because it sounds cool, how many people do you know who can “I own an airline!” Chances are that it is either one, or none, and probably the latter. Some people believe that it was the motivation behind the Alitalia-broke professor buyout deal (more on that later!)
Sentimental value, some business people had a parent who was in the aviation industry. When they were growing up, they went on flights with their parents, on their parent’s airline. When they hear that the airline is going out of business, they feel as though they have a duty to their former self to try to save airlines!
Former employer, some businessmen are former pilots, or did other aviation-related jobs. Sometimes they want to have the satisfaction of saying that they own their former employer. Sometimes, they just save them in order to fire their former boss, who they probably disliked. Other times, it may be that they want to get the aircraft they first flew on, so they can say “That’s my aircraft!”
Financial reasons, operating an airline isn’t cheap. And making it a profitable venture is another story! But if you can get it past the breaking even point, the sky is the limit for airlines! That’s why consortiums like IAG are worth billions!
Some people who have (tried to) save airlines
These are the people who chose to try to save airlines. For some, we know more about than we do for others!
The broke professor who tried to save Alitalia
In 2018, Alitalia was in serious financial trouble. Alitalia needed money, in order to patch itself up, as the airline was hemorrhaging money.
In the beginning Delta Air Lines, EasyJet and Ferrovie dello Stato Italiane (Italian national railway company) were all looking to purchase stakes in the airline. But, by the end of the year, all three companies pulled out due to the severity of the financial hemorrhaging.
Then, an as unnamed Italian professor, who had no previous business experience, offered to buy the airline. The only downside was, that he was broke, and wouldn’t have reasonably been able to afford to keep the airline afloat much longer.
He was ridiculed in the media for this ‘stupid act’, with many saying that if he had revealed his name, he would’ve had to move far away from civilization. (In order to avoid the protests and mockers outside his house!)
The professor did not mention why he wanted to buy the airline, nor did he reveal what had motivated him to make the bid. This has led many people to assume that he was motivated purely by financial reasons. Some have also made the rather savage assumption that it was an attempt to get away from his students!
Izet Rastoder
Izet Rastoder is probably the most high profile person who has done this in recent years. And unlike our Alitalia-professor, he actually succeeded.
Izet Rastoder is the owner of the Derby Banana brand, one of the largest banana companies in all of Europe! Whilst he is Montenegrin, he has a deep passion for Slovenia.
When he saw the Slovenian national carrier- Adria Airways, was about to go bankrupt, he set up his own airline- Air Adriatic. When Adria Airways went bankrupt, he went all over Slovenian national television flaunting that he was going to buy the national airline, and become the owner of Slovenia’s national carrier.
This, naturally was received with much skepticism as Slovenia had already set up another national airline, which was operating in France at the time.
However, in late January, the so called “King of Bananas” bought the Air Operating Certificate (AOC) of Adria Airways. he has not bought all of the assets owned by Adria Airways yet, as they have not come up for auction as of yet.
Izet Rastoder is probably the most high-profile example of someone trying to save airlines from bankruptcy.
Skúli Mogensen
You probably haven’t heard of Skúli Mogensen, but he was the founder and CEO of Wow Air. Wow Air was a low cost long-haul carrier operating out of Iceland. However, in March 2019, the airline went bankrupt, and subsequently suspended all flights.
Skúli was already independently wealthy, having set up OZ Communications and owning the investment firm TÃtan. Using the money acquired from
When Wow Air went bankrupt, he vouched that he would attempt to restart Wow Air, owning the same aircraft, name and logo, and employing the same people. Many people didn’t believe that he would do it, nor would he be able to do it in the first place. But he did.
In October 2019, Mogensen announced that he would be launching Wow Air 2.0. It is expected to launch its passenger division in March, which it has already begun selling tickets for.
Mogensen chose to save airlines because it was his work. It was his company that went under due to poor financial management on his part, that he likely feels he needs to rectify.
Why do you think people save airlines? Would you one day like to save airlines? Tell me in the comments!
Image courtesy of Nicky Boogaard via Flickr