It is with great sadness that I must advise you that Astraeus Airlines has ceased operations with immediate effect.The Board of Directors met this morning and concluded that with little visibility on start dates for proposed winter contracts, the forecast losses during the winter period were simply too great to allow Astraeus to continue in business. The board has resolved to place Astraeus into administration today. Mr Nick Cropper of Zolfo Cooper will be appointed in due course and will contact each member of staff.
This news will come as a great shock to many of you, and I appreciate that by this point in this note your thoughts are turning – quite correctly – to your own future. However, I have nevertheless set out below a very brief history of the recent events that have led to this decision.
As you know, I was the founding CEO of Astraeus and left the company in December 2007 at the point when it had started the transition from charter to ACMI business. The ACMI world is a challenging one and is best served through long-term year-round contracts which avoid the seasonal peaks and troughs of the standard leisure market.
The start of the Astraeus ACMI model encapsulated the best of these aims with contracts with bmi, Ghana International, Palmair, Trawel and ,of course, Iceland Express. Unfortunately for Astraeus, and in keeping with the difficult economic climate, these long-term contracts disappeared one by one leaving only Iceland Express as a long term client.
It is true to say that we had a very successful summer operations-wise with Thomas Cook and Thomson, and both were keen to work with us again next year. However, these are summer-only contracts and this leaves a difficult winter period to negotiate. This was not helped by the Icelandic summer season which is somewhat shorter than the traditional UK charter market adding to the stress of winter placements.
The summer 2011 season was also severely impacted by operational issues on the IEX and MOD contracts. Whether through crew shortages, or engines requiring shop visits halfway through the expected normal lifetime, the fact remains that costs outstripped revenue during the key summer months so we did not have the usual cash reserves required to take us through the lean winter months.
When I was asked by Palmi to rejoin Astraeus on 19th October 2011 it was on the basis that the company’s immediate financial needs had been recently met by a £5m funding injection (taking his overall investment in Astraeus to £25m) and that the future commercial outlook was strong. Regrettably, the expected contracts in Asia, South America and the Middle East failed to materialise on a timely basis and directly led to today’s announcement.
This was clearly not the position I expected when I returned to Astraeus and it is of great personal sadness that today I have to close down the company that I started almost 10 years ago. A bright future was just around the corner, but sometimes we are not blessed with the luxury of time to achieve that goal.
It only remains for me to place on record my sincere thanks to all our fantastic staff, who have given so much to the company in good times and troubled times. I wish you all the best for the future wherever it may take you and I am just so sorry that it did not work out the way we had all hoped.Hugh Parry
The airline’s fleet and their contract status as of the closure were as following.
|Boeing 737-300||G-STRI||Operating for Iceland Express|
|Boeing 737-300||G-STRJ||In Bournemouth, for maint.|
|Boeing 737-500||G-PJPJ||Operating for Iceland Express|
|Boeing 737-700||G-STRF||Operating for Iceland Express|
|Boeing 737-700||G-STRN||Returned to lessor|
|Boeing 757||G-OJIB||Last op’d for BMI|
|Boeing 757||G-STRW||Brize Norton based, for MoD|
|Boeing 757||G-STRX||Was due for a new Thai airline|
|Boeing 757||G-STRY||Was due for maint at HHN|
|Boeing 757||G-STRZ||Returned to lessor|