What Are The Lessons We Can Learn From These Defunct Airlines?
During the 100 years since commercial air travel first became viable, the lists of both new and defunct airlines have grown. When an airline ceases operations, it leaves unanswered questions for customers and employees.
Some of those questions address the immediate concerns of employees facing redundancy, passengers facing the prospect of canceled flights, and suppliers worried about outstanding debts. The other questions revolve around the cause of the collapse, the economic impact on the area around the airline’s operations base, and other aspects that relate to the wider aviation industry.
The collapse of an airline can be a devastating event for everyone involved. In this article, we’ll take a look at some of the most prominent defunct airlines and the lessons we can learn from their failures.
Air Berlin
Airberlin was once one of Germany’s largest airlines. It operated a fleet of over 110 aircraft and served more than 200 destinations worldwide. However, the airline struggled to compete with the likes of Lufthansa and Ryanair and filed for bankruptcy in 2017.
Monarch Airlines
Monarch Airlines was a British charter airline that operated from 1968 until 2017. The airline flew to destinations all over the world, including many popular holiday destinations in Europe and the Mediterranean. However, the airline ran into financial difficulties and entered administration in October 2017.
Tigerair
Tigerair was a low-cost airline based in Singapore. The airline operated flights to various destinations in Asia and Australia. However, the airline struggled to compete with other low-cost carriers and merged with Scoot in July 2017.
WOW Air
WOW air was an Icelandic low-cost airline that operated from 2012 until 2019. The airline offered flights to various destinations in Europe and North America. However, the airline ran into financial difficulties and ceased operations in 2019.
Primera Air
Primera Air was a Latvian low-cost airline that operated from 2003 until 2018. The airline offered flights to various destinations in Europe and North America. However, the airline struggled financially for a number of years and ceased operations in 2018.
Defunct US Airlines
The airline industry in the United States has seen its fair share of bankruptcies and closures over the years. With its long commercial aviation history, there is no shortage of examples. The Wikipedia entry for defunct US airlines is spread over four pages.
Pan American World Airways
The history of Pan American World Airways, commonly referred to as ‘Pan Am,’ is a story of innovation in the aviation industry. Founded in 1927, Pan Am was the first airline to offer regularly scheduled international flights. It was also the first to offer tourist-class travel and to use clipper ships for long-distance travel.
During the post-war period, Pan Am became one of the largest airlines in the world, carrying millions of passengers annually to destinations across the globe. However, the airline struggled financially in the late 20th century and was eventually forced to declare bankruptcy in 1991. Although it no longer exists as an independent entity, the Pan Am brand continues to be associated with excellence in aviation.
Trans World Airlines
Trans World Airlines (TWA) was an American airline that existed from 1930 until 2001. During its 71-year history, the airline went through several changes in ownership and name. It was originally founded as Transcontinental & Western Air, and later renamed to TWA after it acquired several other airlines.
TWA was headquartered in Missouri and operated flights to destinations all over the world. In the 1950s, TWA was one of the first airlines to introduce jet-powered flights, and it continued to be a pioneer in the aviation industry throughout its existence. Despite its long history and accomplishments, TWA declared bankruptcy in 2001 and was subsequently acquired by American Airlines. Today, TWA is remembered as one of the classic American airlines.
Eastern Air Lines
Eastern Air Lines was a major American airline from 1926 to 1991. It was one of the “Big Four” domestic airlines established by the FAA’s Authority to Certify Carriers and Operators for Safety Regulations of 1934. Headquartered at Miami International Airport, Eastern operated Lockheed L-188 Electras, Douglas DC-9s, and Boeing 727-100s on routes to 36 US cities.
Eastern was founded in 1926 by World War I veterans Col. Edward V orable as a Miami-based air transport company and initially focused on charter services before transitioning to regularly scheduled service in 1927. The airline grew rapidly throughout the late 1920s and 1930s, becoming one of the major carriers in the US. Eastern was well known for its distinctive paint scheme, comprised of a yellow and blue cheatline with a red triangle on the tail fin. The airline also had a reputation for outstanding customer service and was often referred to as “The Gentleman’s Carrier.”
Unfortunately, financial troubles plagued Eastern throughout its history, and the airline declared bankruptcy in 1989. It made a final attempt at reorganization but was ultimately unable to compete with the major airlines and ceased operations in 1991. Although it no longer flies, the Eastern name lives on in spirit through its successors
Braniff International Airways
Braniff International Airways was an American airline that operated from 1928 to 1982. The airline was headquartered in Dallas, Texas, and it operated a fleet of domestic and international flights. Braniff was known for its innovative marketing campaigns, which included painted aircraft and bipartisan Tickets to Paradise.
The airline also introduced the “Braniff Place” terminal at Dallas Love Field, which was designed by famed architect Paul Rudolph. In 1982, the airline ceased operations due to financial difficulties. However, Braniff’s legacy continues to live on through its unique history and contributions to the aviation industry.
National Airlines
National Airlines was a major American airline that operated from 1934 to 1980. It was headquartered in New York City and had its main base at John F. Kennedy International Airport. During its heyday, National was one of the largest airlines in the world, with a fleet of over 400 aircraft. National was also known for its innovative marketing campaigns, including the “Friendship” slogan and the “Fly me” advertising campaign featuring Playboy bunny stewardesses.
In 1980, National merged with Pan American World Airways to form Pan Am World Airways, which ceased operations in 1991. However, the National brand was resurrected in 2009 by a small regional airline based in Florida. Today, National Airlines is once again serving passengers across the United States.
Allegheny Airlines
Allegheny Airlines was an American airline that operated from 1952 to 1972. It was founded by Robert Weedon and Odell Simon, two aviation enthusiasts who saw the potential for a regional airline in the northeastern United States. Allegheny began operations with a fleet of four small propeller-driven aircraft, but it quickly grew to become one of the largest airlines in the country.
In 1967, Allegheny merged with another airline, Lake Central Airlines, to form what would eventually become US Airways. However, the new company struggled to compete against larger rivals such as American Airlines, and it filed for bankruptcy in 2003. US Airways was ultimately acquired by American in 2013, bringing an end to the Allegheny legacy.
Hooters Air
Hooters Air was an American airline that operated from 2003 to 2006. It was headquartered in Atlanta, Georgia and was a subsidiary of Hooters of America. The airline’s main hub was at Hartsfield-Jackson International Airport. Hooters Air flies to numerous domestic and international destinations, including Myrtle Beach, South Carolina; Las Vegas, Nevada; Cancun, Mexico; and the Bahamas
Hooters Air began operations on April Fool’s Day in 2003 with three Boeing 737-200 aircraft. The airline’s fleet expanded to five aircraft by August 2003. In 2004, the airline added service to Montreal and Toronto in Canada. Hooters Air also had code-sharing agreements with Continental Airlines, US Airways, and Delta Air Lines
On August 2, 2006, it was announced that Hooters Air would cease all operations on October 1 due to high fuel costs and low passenger demand. All flights were cancelled on September 22, 2006, and the airline ceased operations on October 1st. A total of 362 employees were laid off as a result of the closure. Despite its relatively short lifespan, Hooters Air left a lasting impression on the aviation industry. It was known for its attractive female flight attendants and its racy in-flight entertainment.
Aloha Airlines
Aloha Airlines was an American airline that operated from 1946 to 2008. The airline was based in Honolulu, Hawaii and served destinations throughout the Hawaiian Islands, as well as cities on the US Mainland and Micronesia. Aloha also had a strong focus on customer service and was one of the first airlines to offer complimentary meals and inflight entertainment. In addition, the airline was known for its fleet of Boeing 737 aircraft, which were decorated with an iconic red, yellow, and white livery.
However, despite its many strengths, Aloha Airlines ultimately ceased operations due to high fuel prices and intense competition from other airlines. Nevertheless, the airline remains a fond memory for many travelers who appreciated its friendly service and unique style.
Midway Airlines
Midway Airlines was a low-cost carrier that operated in the United States from 1993 to 2003. The airline was headquartered in Chicago, Illinois, and served primarily Midwestern cities such as Detroit, Minneapolis, and St. Louis. In addition to its low fares, Midway was known for its innovative approach to customer service, which included allowing passengers to bring their pets on board and offering complimentary beverages and snacks.
Unfortunately, high fuel costs and the challenging economic conditions following the 9/11 attacks led to Midway’s bankruptcy in 2003. The airline ceased operations shortly thereafter, leaving thousands of passengers stranded. Although Midway is no longer in operation, its legacy continues to have an impact on the airline industry.
In particular, Midway’s success in catering to budget-conscious travelers inspired a new generation of low-cost carriers, such as Spirit Airlines and Allegiant Air. As a result, Midway’s impact can still be felt more than a decade after its demise.
Challenger Airlines
Founded in 1971, Challenger Airlines was a US-based carrier that operated flights to destinations throughout the country. Though the airline enjoyed several decades of success, it eventually ran into financial troubles and ceased operations in 2001. After filing for bankruptcy, Challenger sold its assets to other carriers and ceased all operations. While the airline is no longer in operation, its legacy continues to be felt in the aviation industry.
Many of Challenger’s former employees went on to work for other carriers, and the company’s innovative approach to customer service inspired many of the industry’s modern policies and procedures. Though it is no longer flying, Challenger has left a lasting mark on the world of aviation.
Air California
Air California was an American airline that operated from 1966 to 1988. Based in Orange County, California, the airline served destinations in the western United States, Mexico, and Hawaii. The airline was founded by Jack Richards and Malcolm MacLean Jr., who purchased the assets of defunct airline Oro-Air. The new airline began operations on August 1, 1966, with a fleet of six Boeing 727 aircraft. it grew rapidly in its early years, adding new routes and aircraft to its fleet. In 1972, the airline was renamed AirCal to reflect its growing network.
AirCal became a major player in the California aviation market, competing against larger airlines such as United Airlines and American Airlines. However, the airline struggled financially in the 1980s and the airline merged with American Airlines in 1988. Although it no longer exists as an independent entity, Air California played an important role in the development of air travel in the western United States.
Flying Tiger Line
Founded in 1945, the Flying Tiger Line was once one of the largest cargo airlines in the world. The company started out as The Flying Tigers transporting supplies for the US military during World War II, but eventually expanded to provide civilian freight services as well. In the 1960s and 1970s, the Flying Tiger Line was a pioneer in introducing new technologies to the cargo industry, such as containerization and computerized tracking systems.
However, by the early 1990s, the company had fallen on hard times. In 1991, it was taken over by Federal Express. Today, the Flying Tiger Line is remembered as an innovator in the world of cargo transportation.
Pace Airlines
Founded in 1993, Pace Airlines was a US-based carrier that provided regional jet service to several destinations across the country. Initially operating out of its base in North Carolina, the airline eventually expanded its operations to include Florida, Texas, and New York. However, despite its growth, Pace Airlines was unable to turn a profit and ceased operations in 2008. The airline’s demise was due to several factors, including high fuel costs and intense competition from larger carriers.
As a result of its financial difficulties, Pace Airlines was forced to declare bankruptcy and ceased all operations. While it was in operation, Pace Airlines provided many passengers with convenient and affordable travel options. However, the airline’s inability to compete with larger carriers ultimately led to its downfall.
Arizona Airways
Arizona Airways was a regional airline based in the United States that operated between 1948 and 1968. The airline was established in 1948 as a scheduled air taxi service between Phoenix and Tucson. In 1952, the airline began operating larger aircraft and expanded its service to include Los Angeles, Albuquerque, and El Paso. Arizona Airways continued to grow throughout the 1950s and 1960s, adding new routes and destinations.
However, financial difficulties meant it was no longer viable and lead to the airline ceasing operations in 1968. Although it was short-lived, Arizona Airways played an important role in the development of regional air travel in the United States
Why do airlines go out of business?
There are several risks in the airline business that can lead to an airline ceasing operation and paving the way to bankruptcy court.
- Financial Struggles
- Poor Management
- Uncompetitive Pricing
- Lack of Innovation
- High Operating Costs
- Regulatory Issues
- Economic Downturns
- Negative Press
- War and terrorist attacks (e.g. 9/11)
Financial problems are often the most cited reason, as airlines require a large amount of capital to operate. Poor management (with the knock-on effect of labor strife) can also lead to an airline’s demise, as poor decision-making can result in high operating costs and uncompetitive pricing. Lack of innovation can also be a death knell for an airline, as the industry is constantly changing and evolving. A chaotic oil market pushing up the price of aviation fuel can be another contributory factor.
Finally, economic downturns can lead to a decrease in demand for air travel, which can force airlines to cut back on flights or even go out of business altogether. The current era (post Covid) is a classic example. Having laid off staff and canceled flights during the pandemic itself, airlines (and airports) find themselves short of staff at a time when the demand for air travel is increasing, but at that same time, the high inflation and economic damage caused by the impact of lockdowns on the economy mean that the current demand may drop off soon.
The Airline Deregulation Action of 1978
The Airline Deregulation Act of 1978 was a watershed moment for the airline industry in the USA. Prior to the Act, the federal government heavily regulated the airlines, setting fares, routes, and schedules. The result was an industry that was largely stagnant, with high ticket prices and few choices for consumers. The Airline Deregulation Act changed all that, freeing airlines to compete on price, schedule, and quality of service. It also stripped the Civil Aeronautics Board of its powers. The Federal Aviation Administration continues the task of regulating the air traffic control system and air safety.
The impact on ticket prices was immediate and dramatic. With carriers now free to set their own fares, prices dropped sharply, making air travel more affordable for millions of Americans. The Act also spurred an increase in domestic and international travel as more people took advantage of the newfound competition among airlines. In short, the Airline Deregulation Act transformed the airline industry, and its effects are still being felt today.
