The encyclopedia · Finance & Accounting · Strategic decision · 2018–2023
Air Belgium tried to be a long-haul airline for five years — then kept only the freighters
Brussels to Johannesburg, Cape Town, Mauritius — a nine-aircraft fleet on a €11M-a-year loss. In October 2023 the passengers went; the cargo stayed.
Air Belgium · 2023-10-03
What happened
Air Belgium first flew in 2018, built around an ambition Belgium had not managed to keep since Sabena: a long-haul carrier out of Brussels. The network reached the Caribbean, Africa and Asia, then shrank, year by year, to three routes — Johannesburg, Cape Town and Mauritius — flown by a nine-aircraft fleet.
The airline's own accounting of why: an €11 million loss in 2021, the war in Ukraine, fuel prices, inflation, and a pandemic that broke both profitability and cash flow. A profitable passenger operation would have needed substantial new investment; none came. On 18 September 2023 the airline announced it would cancel all scheduled passenger flights from 3 October and seek a court-supervised restructuring.
What survived was the part with paying customers who were not passengers: freighter operations for CMA CGM Air Cargo and China's Hongyuan Group, including three 747-8Fs, plus wet-lease flying. The airline later confirmed bankruptcy, with about $9 million in passenger refunds left unpaid. Five years of trying to sell Belgium a long-haul airline ended as a cargo contractor — the business that had customers, minus the one that had the brand.
Why it happened
- A long-haul network needs feed, frequency and deep pockets; a single-country carrier without a hub airline's connecting traffic sells every seat at a discount to fill it.
- The shocks — fuel, Ukraine, pandemic — hit every airline; the difference is that the majors had balance sheets and state backing to cross them, and Air Belgium had neither.
- Cargo and wet-lease revenue existed all along; the passenger brand was the expensive wrapper around the only part of the business that cleared its costs.
The lesson
If one part of the business subsidises another, know which is which — when the funding stops, the market keeps the part that pays for itself and discards the story, so build the plan around the payer.
Sources
- Air Belgium To Halt All Passenger Services For Restructuring
- Air Belgium confirms bankruptcy, passengers not reimbursed
spotted an error? The club wants to know.
More like this
Play Airlines launched where WOW Air died — and ended the same way, six years later
Sir Freddie Laker's Skytrain took on the world's airlines — and they crushed him in court
GFG Alliance financed Liberty Steel on invoices for unsold goods, then its lender vanished
Somewhere, someone solved the problem this company failed at. 2nd Opinion →
Comments · 0
Sign in to join the comments.