While the name suggests that it is the country's flagship airline, Air Belgium was founded in 2016 as a charter and cargo airline linking the Western European country with Hong Kong and mainland Chinese cities such as Beijing, Shanghai and Zhengzhou.
But founding an airline is an expensive and ultimately very risky undertaking and, by October 2023, Air Belgium had stopped running all of its passenger flights as it looked for an investor to help pull it out of accumulating debt.
While a bankruptcy protection program available to Belgian businesses has allowed the airline to do this for nearly a year, a lack of investors who stepped up means that it may soon close up shop for good — on Sept. 3, a Belgian business court granted airline representatives two more weeks to find a solution.
Local news outlet L'Echo reported that Air Belgium saw its revenue drop by more than 40% since it stopped passenger flights in 2023 and took an annual loss of €22 million (roughly $24 million USD).
Court grants Air Belgium extension but bankruptcy still looms
In order to avoid being handed over to creditors, Air Belgium needs to find at least €18 million (roughly $20 million USD) in funding. The news outlet reported further that Chengdu-based carrier Sichuan Airlines was initially in talks of stepping in as an investor but ended up pulling out.
The two-week extension was granted because there is reportedly another interested investor that would come together with the government of Wallonia — a French-speaking region of Belgium containing Brussels and Flanders — to save the airline.
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While Air Belgium founder Niki Terzakis told the court of "several potential investors" and "significant progress" to find them, the auditor working with Air Belgium had previously written that "the entry of a new investor — and therefore [the airline's] continuity — is uncertain."
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Growing debt and losses: Here is why Air Belgium is struggling now
The airline was initially founded with the goal of honing in on what was then rising numbers of travelers between Europe and China but when the country closed its borders amid the pandemic outbreak in 2020, it had to quickly figure out a way to bring in customers.
In 2022, it invested in several new Airbus A330-900 (EADSF) planes to start running new flights to South Africa and Mauritius, an island nation that many Europeans come to for winter holidays, as well as French Caribbean territories such as Martinique and Guadeloupe.
But in the end, none of these flights brought in the necessary traffic and Air Belgium started axing routes before ultimately canceling all passenger flights in September 2023.
It did run some cargo and ACMI leased flights over the last year but the airline's future ultimately depends on an investor who believes in its ability to bring in profit with some help to step in.
L'Echo further reported that the potential "hail Mary" investor is ready to put in €6 million (roughly $6.6 million USD) in exchange for 75% of the company's shares, while the government of Wallonia would step in with the remaining €12 million.
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