Airlines We Lost in 2008

Adam Air, Aero California, Airlines We Lost, Aloha, ATA, Champion, Eos, ExpressJet, Oasis Hong Kong, Palmair, Pan Am, Silverjet, Skybus

It’s time once again for the third annual edition of “Airlines We Lost.” This was a pretty active year, as you can probably imagine. Sadly, my wish last year for Alitalia to be on this year’s list has not come true. That airline soliders on while others have not been so lucky to have a government behind them to prop them up. As I said, last year, let us hope that all the former employees of these airlines find new jobs with ease. I’m probably taking Friday off, so I’ll be back again Monday. Happy New Year!

AlpiEagles TombstoneAlpiEagles – January 3, 2008

We were barely into 2008 when AlpiEagles became the first airline of the year to shut down. To be honest, I don’t know much about these guys, but if I couldn’t include Alitalia, I had to at least find one Italian airline. A Google search found some references that make me think it wasn’t much of a surprise that these guys went under. In fact, I’m somewhat amazed they lasted as long as they did.

Boston Maine (Pan Am Clipper Connection) TombstoneBoston-Maine (Pan Am) – February 29, 2008

It’s not often that I’m happy to see an airline go out of business, but this is most certainly one of them. When the Pan Am name and colors were slapped on this two-bit outfit flying old 727s into backwater airports, it was an embarrassment. To make things even worse, this airline was effectively a union-buster that was given the Pan Am name and routes when the previous version of Pan Am was shut down by the parent company. Earlier this year, the DOT put out a scathing report that the airline was financially unfit, lacked proper management oversight, and didn’t follow rules.

Big Sky TombstoneBig Sky – March 8, 2008

Big Sky was a sad loss, at least for those who relied on the airline to get around the upper Midwest for years. Big Sky was acquired by Mesaba’s parent, but when Mesaba was sold to Northwest, the parent company wanted out of the airline business. The 19-seaters weren’t making much money, so it was time to call it quits. I remember when I was at America West and we signed a codeshare with Big Sky. There were very few airports they served that I’d even heard of before, but they were the lifeline for the people who lived in those places.

Adam Air TombstoneAdam Air – March 18, 2008

If anyone is actually surprised by this one, you must not pay much attention to aviation accidents. Adam Air came out of Indonesia and did a good job of convincing people not to fly it. There were a number of accidents and incidents over its relatively short life span, and ultimately the Indonesian government mercifully shut them down. We should all be able to sleep easier at night knowing that this airline is gone from the scene.

Aloha TombstoneAloha Airlines – March 31, 2008

For me, this is the saddest failure of the year. If this were the Academy Awards when they show the people who died in the last year, Aloha would undoubtedly get the loudest applause. The oldest airline to fail last year, Aloha succumbed to a brutal competitive environment thanks to the entry of go! into the Interisland Hawaiian market. Lawsuits have dragged on, but it appears they have recently been settled with the understanding that go!, the very airline that killed Aloha, will rebrand as Aloha. This was so unpalatable that even the judge put a temporary stop to it.

ATA TombstoneATA – April 3, 2008

Though ATA was an airline that many people hated, I actually never had a bad experience flying them. In fact, I always had good experiences. They reached their zenith in the early 2000s as they grew their Chicago and Indianapolis hubs under now-United drone John Tague but collapsed mightily soon after. Southwest picked up the remains, and the airline limped along for awhile, but ultimately, the owners bought a couple other airlines and shut down the original. A sad end for an airline with a long history.

Skybus TombstoneSkybus – April 4, 2008

Ah yes, remember Skybus? It seems like it was only around for a few minutes, so you may have forgotten them by now. The idea was to offer ultra low fare flights originally only from its Columbus hub. Columbus? Yeah. That might go a long way to explain why it didn’t work. But this airline called it quits before it actually had to. In fact, there was money left in the bank, but the management decided it just wasn’t going to work in the end. By this time next year, we’ll probably have forgotten completely that they ever existed.

Skyway TombstoneSkyway – April 5, 2008

Poor little Skyway, better known as Midwest Connect, died because of Midwest’s insistence on not actually flying any airplanes itself. Skyway was Midwest’s wholly-owned regional subsidiary, but Midwest decided it would rather have SkyWest operate the routes instead. So while Skyway lives on as a ground operations company, it no longer has any planes. Then again, Midwest doesn’t have many of its own planes left either.

Oasis Hong Kong TombstoneOasis HongKong – April 9, 2008

Like Skybus, Oasis HongKong had a meteoric rise only to come crashing down hard. The airline was running long haul, low fare flights between Hong Kong and both London and Vancouver. Apparently, it’s fares were too low, because one day it just disappeared. Many have argued that the long haul, low fare model doesn’t work, though Air Asia X is currently going to do its best to prove that hypothesis wrong. (Nonexistent labor costs help, by the way.)

Eos TombstoneEos Airlines – April 26, 2008

There’s a special place for Eos in my eyes, because I interned with the airline during business school, long before it got started. In fact, it was just me and David Spurlock in a Palo Alto office working on getting funding for the airline back in 2003. The experience was great, but high fuel prices, a very small niche market, and, according to others, weak management, did the airline in. With fuel at today’s prices, it undoubtedly could have held on longer, but it’s not clear that it would have survived.

Nationwide TombstoneNationwide Airlines – April 29, 2008

I’m sure there were a few thousand airlines in Africa that failed this year, but none had a higher profile than Nationwide. This airline, based in South Africa, grew to have a fairly sizable operation that even served London. In 2007, Nationwide was shut down for regulatory non-compliance, but it briefly came back. Of course, a temporary shut down like that is just as bad as being shut down for good, so it did just that and decided to call it quits.

Far Eastern TombstoneFar Eastern Air Transport – May 12, 2008

I don’t know really know a ton about Far Eastern Air Transport except that their tails had FAT spelled out in big block letters. That’s good comedy. I was surprised to find that this airline was actually around for fifty years, primarily as a very strong domestic carrier in Taiwan. Increased competition (in the air and on the rails) put this airline into financial trouble, and it finally called it quits after struggling to the right the ship for awhile.

Silverjet TombstoneSilverjet – May 30, 2008

Like Eos, Silverjet tried to do the all-premium airline model and failed miserably. I’m told Silverjet had a very nice facility at London’s Luton airport, but that wasn’t enough to make it successful. Locating the airline at Luton probably didn’t help much either. Toward the end, there was all kinds of drama. It was said that a Middle Eastern firm would pump money into the airline and refocus it, but that never came through and the airline ran out of luck . . . and money.

Champion TombstoneChampion – May 31, 2008

Though Champion flew charters with its 727 fleet toward the end, its 2 letter code “MG” alludes to its roots as MGM Grand Air. MGM was a luxurious airline flying between LA and New York, but Champion did a lot of sports charters and some leisure work as well. In the end, the aging fleet wasn’t competitive in the charter market and the airline simply opted to shut down and go quietly into the night. Fortunately, it didn’t go away until after delaying the Spurs to a playoff game against the Lakers. Thanks, guys.

Air Midwest TombstoneAir Midwest – June 30, 2008

Little Air Midwest was another casualty in the 19 seat aircraft market that really took a hit this year. This airline had been owned by Mesa for several years, and ultimately Mesa opted to completely shut down its 19 seat operation. I had the chance to fly Air Midwest on one of its little Beech 1900s from Yuma to Phoenix, and I certainly had no complaints. Then again, the weather was good that day. Were it not, I might have had a different opinion of the little airline.

ExpressJet (Branded) TombstoneExpressJet (branded service) – September 1, 2008

Let’s get one thing clear. ExpressJet still exists and is still flying around as Continental Express and as a charter airline. The piece that died was the “branded” ExpressJet operation that was set up to fly point-to-point between smaller cities; sort of a Southwest Express in my mind. If Aloha’s failure tugged at the heartstrings, this one bothers the brain. This model still looks interesting to me, especially with lower fuel prices and a different aircraft type. I just think ExpressJet was ahead of its time on this one.

Zoom TombstoneZoom – August 28, 2008

This quirky airline had a very strange setup. The original airline was Canadian and began flying Transatlantic from Canada. Then they wanted to fly back across the Atlantic to the US from the UK so they set up a UK subsidiary to do the work. Flights went from London to places like San Diego, where no other nonstop service existed. The idea may have made sense in someone’s head, but it didn’t work at all. They collapsed under their own weight.

XL TombstoneXL – September 12, 2008

You knew XL was set on being a low cost carrier when it decided that letters were too expensive and shortened its name from Excel. The British low cost charter operation focused on shuttling pasty white Brits to sunspots, but apparently it wasn’t concerned about getting them back when it stranded fifty thousand travelers after its shutdown. Another 200,000 had future bookings so this was likely a more expensive winter than many had planned.

Aero California TombstoneAeroCalifornia – October 4, 2008

Wait, didn’t these guys already shut down? You know it, but somehow the Mexican airline didn’t make my 2006 list. AeroCalifornia operated aircraft so old they were actually flight tested by Charles Lindbergh (um, maybe not), but they were considered airworthy enough to fly to the US until 2006 when it first shut down. The airline made a brief comeback with only domestic Mexican operations, but that again ended abruptly when they ran out of money.

Sterling TombstoneSterling – October 29, 2008

Sterling quickly rose to be a massive low fare airline in Scandinavia and Europe in general, especially after acquiring Maersk. I flew Maersk once and loved the product, but Sterling had plenty of ownership shifts and never fully found its groove. It didn’t help that its most recent owners were Icelandic, not exactly a good place to be from a financial perspective these days. Cimber Air says it’s going to resurrect the airline, but, well, we’ll see about that.

European Aviation TombstoneEuropean – November 30, 2008

Oh man, am I finally done? European wouldn’t get a mention here except for two things. First, it was one of the last operators (if not the last) of the 737-200 in Europe. And second, it operated for Palmair, an airline I really enjoyed learning about this year. Palmair was surprised by the failure of European, but it has found an aircraft from Jet2 to pick up the slack for now. Meanwhile, European will probably disappear quietly without any fanfare at all.

[Airlines We Lost in 2007]
[Airlines We Lost in 2006]

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25 comments on “Airlines We Lost in 2008

  1. there is no way this is all the airlines that have gone bust. NO WAY. like you said, brobably a thousand airlines went out in africa alone.

    ps. i glad to post “the first of the last” comments of the year.:)

  2. I’ll miss Oasis Hong Kong. They were a good airline, they had good service, great staff, and to another selfish extent…they were a client of mine.

    It was quite sad to fly out of FRA one afternoon in April and look out to see the two undelivered Oasis Hong Kong 744s in full Oasis coolours, sitting outside a hanger waiting to be delivered to another airline.

    The low cost model can work in long haul, however Oasis waited to long to launch service to the US and Oz, which it was approved for. It was doing well between HKG-LGW and HKG-YVR, had it added SYD and SFO it should have been able to possible survive.

    But like many things in business,if you wait and wait and wait, you are doomed to fail.


  3. Axelsarki – You’re right, this is the abbreviated list. There were plenty more, but I had to cut it off somewhere. Think of this as the highlight (or lowlight) reel.

  4. It’s starting to get lonely at the top in the airline industry. Not many left that satify their customers. I’m wondering if there is any innovation in the works for 2009. There is so much technology available on the ground that it has to eventually become commonplace on airlines. I guess these companies fear making the investment.


    1. Two weeks ago me and my brother talked about getting into the airline business
      and we are going to start with only 4 737 jet’s we wont be flying out of the country only regional within canada from toronto we dont have a name yet but
      if you have one please let me know.

  5. If ExpressJet was ahead of its time, where was Independence Air? I agree the model is interesting, but implementing it out of a need to have something to do with a bunch of RJs doesn’t seem to be the way to go about it.

  6. David M – This has come up before in a few different posts and comment sections. In my eyes, there is just about no comparison between Independence and ExpressJet. Independence was arrogant and stupid, and they were destined to fail from day 1. Here’s what I’ve posted before:

    *Independence chose to launch high frequency service from a central hub while ExpressJet chose to launch low frequency service on point to point routes

    *Independence launched flights in direct competition with United Airlines resulting in a tremendous increase in capacity while ExpressJet launched flights on routes that had no nonstop service from any other carrier

    *Independence threw it’s entire fleet into this operation resulting in a very fast ramp-up while ExpressJet only had a small portion of its fleet dedicated to the branded service for a more conservative start

    Clearly having the bunch of RJs meant they had to use a less than ideal aircraft for the routes, but the idea was still a great one, and I remain convinced it’ll work in some form eventually. Independence? If we ever see someone dumb enough to try that again, they’ll be crushed just as they were the first time around.

  7. I misread your dead-airlines post intro for 2007 and had an idea: What about predicting some airlines that you don’t think will survive in 2009? Might be challenging to be aware of, let alone predict, non-US carriers (because there aren’t many carriers left in the US in a position to crumble) but it could be fun. Too bad the obvious picks like Silverjet and EOS are already gone. What do you think of Air One, Open Skies, Virgin America, etc?

  8. Brett, regarding Skybus: if you looked at the loads for the individual routes, you’d see that Columbus, the 15th largest city in the U.S., was not the problem. Same thing for that metropolis of Portsmouth, NH, which got some direct flights to Fla. for a few months before SX went under. Fantastic load factors. Skybus proved that for nonstop flights at a good price to places they want to go, people will cross state lines and even stay overnight in a local hotel to take advantage. The mistakes were more in the area of over-expansion and adding destinations that didn’t make sense.

    Also, you mischaracterize the bankruptcy filing. They did have a modest amount in the bank when they went under, but they had heavy liabilities and were in imminent danger of losing more money for vendors, investors etc. if they were to keep operating under the conditions they were boxed into. Would you recommend that they would have driven it completely into the ground? They made mistakes, but the credit crunch and fuel prices were the overwhelming factors that they couldn’t overcome.

    And no, those of us in Columbus won’t have forgotten Skybus a year from now for many reasons.

  9. Marla – Fantastic load factors? That’s hardly the case. An airline operating on the ultra low fare principle really needs to get ultra high load factors to make any money. Skybus hadn’t topped 80% since its first summer, and in 2008 it never topped 70%. Toward the end it was far lower than that. We can go into individual routes, but it’s not worth it. Let’s also remember that load factor doesn’t mean everything. Columbus to Oakland had one of the higher load factors, but it was one of the earlier flights to be canceled. They may have had a couple routes that could have worked, but you can’t build an airline on just a couple routes.

    At the time of the bankruptcy filing, the Dispatch reported “The airline listed its liabilities as greater than $50 million to as much as $100 million. It pegged its assets as greater than $100 million to $500 million.” That does not sound like an airline that had to file bankruptcy and shut down when they did. Instead of trying to fight on, they obviously decided there was no hope, and it was better off just calling it quits.

    It’s a fair point that people in Columbus will remember Skybus beyond a year, but the rest of the world will have forgotten.

  10. Seazed operation in Russia – KrasAir, Samara, Sibaviatrans, Domodedovo airlines, Omskavia, Dalavia, Aviaprad.

  11. Brett,
    Sorry to labor a point, but Skybus was a big part of my life and job for a year. My point about load factors was that if you removed the routes that didn’t make a whole lot of sense, there were jewels in there that would have worked in normal times. Their original routes were largely based on Port Columbus’ list of top markets unserved by nonstop service. Without checking the data, I seem to remember load factors from Portsmouth to Fla. in the 90s pretty consistently. And I do know that loads aren’t everything, but if your argument is that there aren’t enough people in Columbus to support flights to places like L.A. and Ft. Myers, you’re incorrect. If your argument is that people on the other end don’t want to visit Columbus, that’s not really relevant. Does Allegiant expect people in Las Vegas to fly to the little towns they serve? But we did get a bunch of nice travel articles written about Columbus solely due to the airline.

    The initial story about the bankruptcy was based on a very general document any company filing for bankruptcy is required to submit. Just like load factors, it doesn’t tell the whole story. Believe me, there was a lot of money and pride riding on not shutting it down before they felt they had no other option.

    Happy new year, let’s hope it’s a better one for us all. And don’t forget, Skybus was the U.S. airline that was probably the biggest test case for all those fees those of you in the rest of the world are moaning about now. You’re welcome.

  12. Marla – No reason to apologize at all. This is a great discussion, and it made me go back to the files to pull up some numbers. I pulled down the government data for May 2007, when they started, through February 2008. It appears that they never reported beyond February, because they had probably shut down by the time those reports were due. So, we’ll go with that info. I put my spreadsheet up on the site if you’d like to see details.

    Skybus never achieved a 90% seat factor on a route in any one month. Strangely enough, the highest load factor was 86.5% on Columbus – Bellingham in August 2007. In 2008, no Columbus route ever went above 75%. Let’s look more closely at Florida, as you mentioned.

    Columbus – Ft Lauderdale reached 83.3% in June 2007, its first full month of operation, but after that they doubled capacity and it settled in the high 60s to mid 70s.

    Columbus – Punta Gorda didn’t start until December 2007, but it did reach 76.5% that month. It dropped for the next couple months until reporting stopped.

    Columbus – St Augustine was different. It started in the 70s before peaking at 82.4% in November 2007 at which point they doubled capacity and seat factor plunged as low as 55% in February.

    I have no doubt that they made some very bad route choices here (Milwaukee? ouch), and I also firmly believe that there are some routes that can support an operation like this. But I don’t see a successful outcome for an airline that’s based in Columbus and expects to build a large scale operation there.

    My argument is precisely that there aren’t enough people in Columbus or visiting Columbus (no need to distinguish between the two, because they both fill planes) to profitably support much more air service than is already there. Now that fuel has come down, some more marginal flights may come back, but the economic downturn makes bolder moves highly questionable.

    Might Delta bring back LAX to Columbus again? Sure, I could see that. But I don’t see much beyond a flight or two. In fact, I would expect to see a little shrinkage as Delta/Northwest rationalizes its network. Some of those Cincinnati and Memphis flights go easily go away, and that’s something we’ll see all over the US.

    Happy New Year to you as well, and I hope that you’ll keep reading and contribute more. If you read, you’ll see that I’m not one of those people moaning about fees in general. In some cases and particularly for some airlines, I think they make a lot of sense.

  13. Benji – I’m not a big prognosticator these days. Things change so quickly in this industry that it’s hardly worth it. Probably the only safe bet is that Alitalia will continue to exist! Of the three you mentioned, Air One is the one I’d bet will disappear first. Why? Because it’s scheduled to happen on Jan 13 when it emerges with the new Alitalia! OpenSkies is a tough one, because it’s really at the whim of BA. It isn’t big enough on the whole to know if BA sees a reason to keep it, even if it isn’t doing well. And as for Virgin America, it all depends upon what tricks Branson has up his sleeve. I cannot understand why anyone would want to continue to invest in that airline, but it keeps happening. It will be interesting to see what happens with them in the next year.

    L – I can’t believe I left KrasAir out. That was certainly one I should have mentioned. Thank you for adding to the list.

  14. re: Skybus –
    It’s not difficult to get high load factors if the fare is low enough. The trick is to do it and make money.
    Happy New Year –

  15. Hi, I just came across this site and have to say, well done on your list. I thought this sort of information would be widely available, but I’ve not seen anything as comprehensive and well presented as this. I also like your personal take on each concerned.

    I know you say this isn’t a full list but a couple of other european airlines that failed this year are LTE (Spanish charter) Futura (Spanish charter) Futura Gael (Irish/Spanish parent charter) and Euromanx (Isle of Man regional).

    The other thing I’d like to say is regarding EOS & SilverJet. EOS, based at Stansted airport in London was a top end carrier as you likely know working with its founder. It offered a first class service at business rates, but it, like MaxJet (more of a step above premium economy, but not quite business!?) not only had the problems of credit and fuel prices but also of American Airlines. AA decided to launch on the same JFK-STN routing, OK it offered economy class, but I strongly believe it was only servicing it’s pre-existing route authorities to kill both carriers. Job done it quit the airport. I do believe that there was a niche for both airlines, perhaps EOS moreso, but perhaps not from STN.

    SilverJet had what EOS never had – it’s own terminal, which in some ways made it’s offering even more first class, even though it was positioned as below EOS but above MaxJet in it’s offering!! SilverJet appeared to have a fairly promising start, but like all things, it takes time, I think they had an awful lot of capital expense to start with, partly offset by use of Newark and Luton. But the arrival of AA down the road (with it’s Frequent Flyer program and route network) didn’t help it, nor the fact that MaxJet & EOS pipped it to the post in commencing ops. Of course neither then did the negativity surrounding MaxJet and EOS’s failures. The spotlight was on SilverJet and it doesn’t matter how good a company is, once the media and negativity takes hold, the bookings dry up and bang.

    I’m not an expert, but an enthusiast, and I like the idea of the small guy’s having a go. I like competition too, but where it’s fair. Short term greed doesn’t work well either, I look at Stansted airport now, which has gone from 3 to 0 transatlantic services – once again. It will be interesting how Air Asia X fares – the main difference there is it’s pre-existing internal asian route networks making it attractive for connections… I think Richard Branson’s hand’s in there somewhere too.

    Once again, thanks for a great summary – sorry to ramble!

  16. I didn’t see Primaris Airlines on this list. Unfortunately for them, they ceased operations in early December 2008.

  17. Bananamanuk – I actually had LTE, Futura, and Euromanx on my list, but I decided to leave them off since they were very small and/or charter. I could have found plenty more, I’m sure.

    Thanks for the very good summary on the premium airline situation in London. While I’m sure that AA’s entrance and subsequent exit hurt the little guys, I don’t think they would have survived even without AA ever entering. Fuel was ultimately what did them in. I mean, the cost of sending a 757 with 48 seats across the Atlantic skyrocketed with high fuel. Of course, it’s hard to say if they would have made it even with lower fuel prices.

    Oh, and about Air Asia X. Besides the tremendous feed opportunity from the Air Asia network, they have one more thing going for them. Labor costs are nonexistent because wages are so low in that part of the world. That can help profitability a lot.

    PJNelsen – Yep, Primaris was another one I left off the list. They were so small and only did charter. Their grand plans for flying passenger 787s in premium configurations never even got close to happening, and they ended up being just a lot more talk than anything. That’s why I left them off.

  18. Hi CF thanks for that, as you say there are probably many more – unfortunately – that could have been added to the list. I think you raise a really good point about Air Asia X as well, I never thought about their labour costs.

  19. Does anyone know how many airlines went bust in 2008 alone? I need it for my coursework.
    Well appreciated
    btw – great list

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