Icelandic-owned Sterling Airways to file for bankruptcy

Icelandic-owned Sterling Airways is the latest airline to add to the industry’s woes after it said it is to file for bankruptcy.

The budget carrier said as well as soaring fuel costs, the Icelandic financial collapse was responsible for its demise.

The collapse has left up to 700 passengers stranded at London’s Gatwick airport and a spokesperson for the airport said a representative from Sterling is distributing leaflets to passengers affected explaining the position.

The airline, which is based Danish capital Copenhagen, operated services from Gatwick to Copenhagen and Stockholm. It also flew to some 40 destinations in Europe with a fleet of around 27 Boeing 737 aircraft. The airline has a workforce of approximately 1,100.

In a statement, Sterling said over a three to four weeks period, the whole Icelandic financial system melted down, and that resulted in our shareholder being unable to continue his support to the company.

Negotiations have been conducted with several potential investors, but it was impossible to make ends meet, added the company.

Furthermore, the company explained that customers who have purchased tickets on its website would not be refunded, nor would return flights be honoured.

Sterling is the latest in a long line of airlines who have gone bust over recent times.

Earlier this month, Spanish-based airline, LTE International, suspended all operations after announcing it was difficult to meet operational expenses.

Last month, XL Airways, the UK’s third-largest tour operator, ground 21 planes which resulted in 85,000 people stranded overseas. Other airlines that have gone out of business this year include ATA Airlines, Aloha Airgroup, EOS, Maxjet, Oasis, Silverjet and Skybus Airlines.

Meanwhile, major players in the industry such as British Airways, saw its profits plummet by 90% in the three months to August, while Alitalia had to be saved by an Italian consortium.

According to the International Air Transport Association (IATA), global passenger traffic fell 2.9% last month, while cargo traffic fell 7.7% compared to the same month in 2007.

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