The board of directors of Air Belgium, which operates services to South Africa, suddenly announced on Monday afternoon that the carrier would cease all passenger operations, with effect from October 3. Henceforth, the operator will focus on its two activities that are profitable and show promise of growth – air cargo and “wet lease” (more technically, Aircraft, Crew, Maintenance and Insurance, or ACMI) services. (ACMI is providing an aircraft, and flight and cabin crew, plus its maintenance and insurance coverage, for use by another airline.)

This move had been made necessary to ensure the airline’s viability, affirmed the board. In March it had already cancelled its unprofitable passenger routes to the French West Indies and elsewhere in the Caribbean, focusing instead on just two long-haul destinations, namely South Africa and Mauritius.

Simultaneously, the airline has requested the Belgian business court to start judicial reorganisation proceedings. If the court agrees to do so (it will consider the request in the immediate future), it will permit the company to renegotiate its agreements with its creditors, to reduce its debt (whether by establishing more favourable repayment terms, or reducing the debt, or deferring interest payments, or a mixture of any or all of these). Such judicial proceedings will also allow the carrier to reorganise its business, including the disposal or discontinuance of unprofitable and unviable activities.

In its statement, the airline’s board highlighted the “numerous disruptions” suffered by the global aviation sector over the past three years. First, the forced grounding of its fleet in 2020, owing to the Covid-19 pandemic, had weakened its finances: revenues had been drastically cut, but fixed expenses had not reduced.  

“In 2022, just as the post-Covid recovery was getting under way, the war in Ukraine led to a precipitous increase in fuel prices coupled with a negative trend in the euro/dollar exchange rate. Moreover, the inflation that followed the drastic rise in energy costs reduced the purchasing power of consumers,” reported the board. “All these factors have had a very severe impact on the profitability of the business and on the cashflow of Air Belgium.”

Regarding travellers who have booked tickets with the airline, it will continue to operate flights as normal until October 3. In the case of passengers with outbound flights scheduled before October 3 but return flights scheduled after that date, Air Belgium will carry them outbound and arrange their return flights, either using its own aircraft or ensuring that they have seats on another carrier. Flights booked for after October 3, and paid for, will be cancelled and the travellers reimbursed “as a matter of priority in the scope of the [judicial] proceedings”.