Sterling files for bankruptcy today!

[tolipanebas]

Sterling airlines, the biggest Scandinavian low cost company, has announced today that it has no other option but to file for bankruptcy later this day, as its main shareholders are unable to raise more money to keep the company flying due to the financial crisis which is hitting Scandinavia and more in particular Iceland, the homeland of Sterling biggest shareholder.

A press release is on their home page:
http://www.sterling.eu

Here's the English version of it:


29. oktober 2008

Dear customers, employees and other stakeholders,

During the last few weeks, the management, board of directors, and the shareholder of Sterling Airlines A/S have been fighting a battle to keep the company alive. Sadly, this has not had a positive outcome, and we have therefore decided to file for bankruptcy which will be done later today.

Background

During the last three years, Sterling Airlines A/S has been through a lot of changes and since acquired by new shareholders in spring 2005 the company has taken on a merger with Maersk Air A/S. In 2005, the total loss of both airlines exceeded 800 MDKK and both owners wanted out one way or the other. Therefore, all jobs in both airlines were at stake and so was also the competitive landscape in Scandinavian aviation since only the presence of a low cost carrier would ensure healthy competition and pricing on the market.

The merger process started in the autumn of 2005 and lasted until mid-year 2006, and by that time we employed over 1,200 employees with far more job security than before, and we had expanded our route network to enable more customers in Scandinavia to travel for less money.

Our operation was progressing positively and our finances were improving considering the massive losses that had been encountered in the preceding years. In 2007, we were doing very well and saw that more and more customers were choosing Sterling, and we ended the year with a positive EBITDA (operational profit) for the first time in many years.

Oil and financial crisis

With the global financial recession that started in the autumn of 2007, Sterling by winter 2007 – 2008 was seeing signs of stagnation in the market. Significant fuel cost increases, and at the same time a planned heavy expansion of our activities, made us more exposed than we would have been otherwise.

By spring 2008, the airline industry was hit by decreasing demand and rapidly increasing fuel prices. That led to Sterling accumulating large losses. During summer and autumn the management of Sterling implemented a restructuring plan of the company resulting in a reduction in fleet and manpower, and a pull-out of a lot of loss-making activities, without compromising our services. The full effect of these actions were planned to have impact start of 2009.

To get the company restructured, the shareholder of Sterling gave financial support from the end of July 2008 to the end of September 2008 transferring 444.5 million DKK to the company. The plan was to continue financial support into 2009. On the 29th September 2008, the Icelandic financial environment started to collapse. Over a 3 to 4 weeks period, the whole financial system melted down, and that resulted in our shareholder being unable to continue his support to the company. Negotiations have been conducted with several potential investors, but it was impossible to make ends meet. The inevitable result is that Sterling Airlines A/S has no option but to file for bankruptcy.

Sterling Airlines’ trademark has always been excellent staff and service. Among the staff the Sterling spirit will continue to exist. We have made our mistakes over the years. But hopefully we have done more right than wrong, and at least we have made the market more competitive to the benefit of our customers.

Information to Sterling Passengers

Customers who have directly purchased their tickets on Sterling’s website will unfortunately not be refunded neither will their return flights. You therefore have to book your return flights with another airline company.

If you have paid for a flight by credit card, we advise you to contact your bank or credit card company to ask for a possible refund.

Customers who have booked their flights through a travel agency or tour operator should initially contact them.

Passengers who have booked their tickets through Sterling, but is flying with Norwegian, should contact Norwegian directly on one of the below phone numbers:

+47 21490015 (from outside Norway)

815 21 815 (from Norway)

Passengers currently staying abroad in hotels, or hiring a car through Sterling business partners, are still able to stay in their hotel or keep the hired car for the relevant period of time, as such services are paid for through our business partners and not Sterling. However as for your return flight, you will need to find alternatives for your final destination.

Please note that if you have booked your travel/hotel/car through a travel agency or tour operator, please contact them upon your return for possible refund of expenses for your return flight.

We understand that most travel insurance does not protect holders from airline insolvency but should you have taken insurance please contact your insurance company for clarification.

We will later put on a FAQ and hope that this will help you in this very unfortunate situation.

[Stij]

They have rotation between CPH and BRU tonight... It still says "scheduled"on Bru Airport's website...

Good luck everybody, employees and passengers,... you'll need it!

Stij

[tolipanebas]

They have rotation between CPH and BRU tonight... It still says "scheduled"on Bru Airport's website... Good luck everybody, employees and passengers,... you'll need it!
Stij

I bet the flight is going to be cancelled, as all their flights are said to be halted pending the bankruptcy verdict.

Now, if you're booked on that flight, don't count on being rerouted!
As Sterling says in their press release: re-arrange your travel yourself and don't count on a refund either if you have booked directly through their webside...

Well there's always the SN and SK flights to book on, but you can count on a minimum of 250 euro one way excluding taxes for a last-minute ticket booked at the airport. Guess SN and SK will rack in a few extra tens of thousands of euro's tonight on their CPH flights.

[Prevangor]

Meanwhile, SAS and Norwegian have promised to help the victoms of Sterling and take them home for free. (English versions of this news should come online later today).

http://www.aftenposten.no/reise/nyheter ... 739821.ece

[sn26567]

Sterling Airlines bankrupt - 29/10/2008

The Danish low-fare carrier Sterling Airlines has announced this Wednesday that it is filing for bankruptcy. All Sterling flights are cancelled, including the daily evening flight from Brussels to Copenhagen.
The Sterling tickets will probably not be refunded. Two other airlines that operate a direct service on the Brussels-Copenhagen route offer an exceptional reduction to Sterling passengers. More details are available on their websites: Brussels Airlines and SAS.

Brussels Airport news release - 29/10/2008

[sn26567]

As Trends/Tendances magazine was already suggesting yesterday, this could be a serious blow for the low-cost terminal of Brussels Airport.

[sn26567]

Well there's always the SN and SK flights to book on, but you can count on a minimum of 250 euro one way excluding taxes for a last-minute ticket booked at the airport. Guess SN and SK will rack in a few extra tens of thousands of euro's tonight on their CPH flights.

Not exactly! SN offers to host the Sterling passengers for just 75 euros return, as mentioned in the press releases on their site (currently only in French and Dutch: why not English?)

[LX-LGX]

As Trends/Tendances magazine was already suggesting yesterday, this could be a serious blow for the low-cost terminal of Brussels Airport.

They had 6 flights per week (CPH-BRU-CPH daily, except Saturdays), so from financial view only, it's bad news off course, but not a very big loose.

[jan_olieslagers]

They left a void but it will soon be filled:
http://www.luchtvaartnieuws.nl/news/?id=28335
No mention of Brussels services, though.

[Atlantis]

As Trends/Tendances magazine was already suggesting yesterday, this could be a serious blow for the low-cost terminal of Brussels Airport.

With only one destination with one airline, this is no danger for the LCT. Besides there are plenty of LCC on Brussels Airport and also the leisure companies would use this new terminal.

They left a void but it will soon be filled:
http://www.luchtvaartnieuws.nl/news/?id=28335
No mention of Brussels services, though.

Months ago there was a "chance" that Norwegian would took over the NB flights to/from Oslo to Brussels Airport.

But LCC to the Scandinavian countries never worked.

[sn26567]

As Trends/Tendances magazine was already suggesting yesterday, this could be a serious blow for the low-cost terminal of Brussels Airport.

They had 6 flights per week (CPH-BRU-CPH daily, except Saturdays), so from financial view only, it's bad news off course, but not a very big loose.

With only one destination with one airline, this is no danger for the LCT.

But you shoulld remember that Sterling had three destinations, some of which were served twice a day. The intention of Sterling was not to scale back, but they were compelled to do it for economic reasons.

[LX-LGX]

Stockholm and Oslo were cancelled few weeks ago, so Copenhagen was their last one onto Brussels.

(same applies for their routes to/from Amsterdam)

[Atlantis]

As Trends/Tendances magazine was already suggesting yesterday, this could be a serious blow for the low-cost terminal of Brussels Airport.

They had 6 flights per week (CPH-BRU-CPH daily, except Saturdays), so from financial view only, it's bad news off course, but not a very big loose.

With only one destination with one airline, this is no danger for the LCT.

But you shoulld remember that Sterling had three destinations, some of which were served twice a day. The intention of Sterling was not to scale back, but they were compelled to do it for economic reasons.

Only Copenhagen survived this winter and next summer. But that's history.

[LX-LGX]

Off topic for Sterling, but not for the reason why they went out of business:

Air Berlin today announced that dba (Deutsche BA) will be folded into Air Berlin as from 30 Nov 2008. High fuel prices are given as reason.

Cockpit crew and cabin crew from dba will be offered similar jobs within Air Berlin.

The three oldest dba 737's will be retired from service.

http://www.iht.com/articles/ap/2008/10/ ... in-DBA.php

[Atlantis]

And also here: sorry also off topic.

http://www.hln.be/hln/nl/1901/reisnieuw ... rlin.dhtml

[zteven]

It was a nice company to work with.

A shame it has to end like this (again).

Greetz



Steven

[sn26567]

Transavia Airlines has announced it will make use of the void left by the bankruptcy of Sterling Airlines by establishing a new base in Copenhagen:

• Amsterdam-Ibiza: 4x weekly B737-700 service starting on April 10
• Copenhagen-Alicante: 3x weekly B737-800 service starting on December 9
• Copenhagen-Barcelona: 4x weekly B737-800 service starting on December 8
• Copenhagen-Faro: 2x weekly B737-800 service starting on December 13
• Copenhagen-Las Palmas: 2x weekly B737-800 service starting on December 15
• Copenhagen-Malaga: 5x weekly B737-800 service starting on December 8
• Copenhagen-Nice: 5x weekly B737-800 service starting on December 14
• Copenhagen-Rome Fiumicino: 4x weekly B737-800 service starting on December 11
• Copenhagen-Salzburg: weekly seasonal B737-800 service starting on December 13
• Copenhagen-Tenerife Sur: 2x weekly B737-800 service starting on December 14

Transavia has also based a B737-800 in Billund to operate charter services on behalf of a Danish tour operator.

Source: CH-Aviation