Spanish airline files for bankruptcy

January 31st, 2012 - 12:00 pm ICT by IANS  

Barcelona, Jan 31 (IANS/EFE) Spanish airline Spanair, which suspended operations last weekend, filed for bankruptcy Monday amid a debt exceeding 300 million euros ($393 million), judicial sources said.

The carrier’s lawyers are anxious to ward off any attempt by creditors to force Spanair into an involuntary bankruptcy that would drastically reduce the firm’s room for maneuver, the sources said.

Spanair’s chief creditor is Sweden-based SAS, which was the Spanish airline’s majority owner until 2009 and retains a 10 percent stake in the carrier.

More than 20,000 travelers were left in the lurch by Spanair’s decision to cease flight operations early Saturday with only a few hours’ notice.

Headquartered in Barcelona, Spanair employs around 4,000 people, with half working directly for the airline and the rest for contractors that provide ground services, cleaning and maintenance.

Budget airline Ryanair has already asked European Union authorities to ensure that Spanair does not receive any additional public money in the course of the bankruptcy and reorganization.

Barcelona and the Catalonia regional government have funneled 150 million euros ($186.76 million) in public funds to Spanair since 2009.

Spanair, Spain’s No. 4 airline, has been in financial straits for several years.

Management decided late Friday to halt operations after Catalonia said it would not provide any more public money to Spanair and Qatar Airlines declined to invest in the carrier.


Related Stories

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |