This Month Three Years Ago The World Lost Four Airlines

It was a rough year for airlines in 2008, fuel prices were climbing at impossible rates, passenger numbers were dropping, the introduction of ancillary fees were being introduced and airlines of all sizes were feeling the impact around the world.

As April 2008 began the writing was on the wall for some airlines that managed to survive and other airlines that appeared to be OK suddenly evaporated. Watching airlines fall like dominos, both established airlines and new comers, it was an unsettling time.

The first airline to fall from the skies was ATA Airlines on the 3rd of April.  ATA was an established low cost carrier, flying throughout the United States and known for its affordable fares to Hawaii, offering interline service from Southwest Airlines at its hub at Chicago’s Midway Airport. In addition to ATA’s regular passenger service, the airline was also a the largest charter carrier in North America, the primary charter airline for the United States Military and a subcontractor for FedEx.

Following ATA’s unexpected loss of a significant U.S. Military contract and an increase in fuel prices, the airline filed for Chapter 11 Bankruptcy Protection on the 2nd of April 2008 and announced its operations would cease at 4:00am EST, on the 3rd of April … while it still had a number of red-eye flights in the sky.

One day after the closure of ATA Airlines, upstart ultra low cost carrier Skybus Airlines would pack it in and throw in the towel after less than a year of flying. Skybus was created to follow the business model of Ireland’s Ryanair, flying to secondary airports, selling ad space on everything, however its route structure was ineffective and while it blamed a slumped economy and rising fuel costs … the airline’s routes ultimately did them on.  Skybus first flew on the 22nd of May 2007 and on the 4th of April 2008 Skybus announced it was shut down its operations on the 5th of April.

The next airline to fall was unexpected, a new airline that had won numerous awards in its short flying career awards, including being selected as the “World’s Leading New Airline” at the 2007 World Travel Awards … this airline was Oasis Hong Kong Airlines.

Since the airline’s first flight between Hong Kong and London on the 26th of October 2006 the airline showed promise as a contender in the Hong Kong long haul market. With Steve Miller at the helm, the founder of the successful Hong Kong carrier Dragonair, now owned by Cathay Pacific, the airline had a defined vision and a sustainable growth model.

Oasis Hong Kong was unusual in that it was a low cost airline that offered both economy class and business class cabin, however the airline amazingly broke even after only six months of service and a business model that offered a lower Cost Per Passenger Seat Mile that its competitors.  Following London, Oasis Hong Kong added Vancouver to its routes (a route I flew quite a few times with them, both while working on projects for them and as a regular passenger) and was poised to launch service to Australia, with six months of seats already sold  … but then like other airlines the unexpected rise in fuel costs and an increase in competitive pricing from competitors such as Cathay Pacific, Virgin Atlantic and British Airways the airline quickly went from moving forward to cashing out.

On the 9th of April 2008 Oasis Hong Kong Airlines was suddenly liquidated without any warning or public signs of financial troubles.

The last airline to collapse during the month of April 2008 was the oldest and most established airline of those to fall, Hawaii’s Aloha Airlines. Aloha began flying in July of 1946 and first turned an annual profit back in 1952, a modest US$36, 410.12.  In Aloha Airlines’ history the airline was innovative, first acquiring “Quick Change” Boeing 737s allowing the airline to operate the aircraft for passengers during the day and operate the aircraft as a freighter at night, then in February 1986 Aloha become the first airline to operate ETOPS Boeing 737s for long-haul flights.

While Aloha Airlines had been the second airline anywhere to operate an all turbine fleet in 1961, chosen to use their aircraft to haul both passengers and cargo, as well as operating the first ETOPS 737s … the airline over all had an aging fleet, operating out dated Boeing 737-200s.  Top keep the airline operating, Senator Daniel Inouye (D-Hawaii) obtained FAA exemptions to allow the airline to continue flying with older, extremely loud engines on inter-Island routes, despite them disturbing residents, while competitor Hawaiian Airlines purchased newer quieter jet that used less fuel.

On the 30th of December 2004 Aloha Airlines filed for its first Chapter 11 Bankruptcy Protection, emerging from that bankruptcy on 17th of February 2006, however shortly after Aloha emerged by bankruptcy Mesa Airlines would establish Go! as an inter-Island carrier in Hawaii, starting operations on the 9th of June 2006 with five Bombardier CRJ-200 aircraft that were more economical than that Aloha’s fleet of inter-Island Boeing 737-200s.

Despite Aloha Airlines being a long established airline, on the 20th of March 2008 the airline filed for Chapter 11 Bankruptcy Protection, citing increased fuel costs and the inability to compete with the lower fares offered by competitors. Aloha Airlines ceased operations on the 30th of March, initially laying off 1,900 o the artiness 3,500 employees.

At the time Aloha Airlines ceased operations, Hawaii’s Governor Lina Lingle requested that Federal Bankruptcy Judge Lloyd King “forcibly restore passenger service,” however the request was denied, with the judge stating that the court should not interfere with business decisions.

April 2008 was a brutal month of airlines that hopefully we will not see recreated again in the future.

Happy Flying!

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