Austrian regional carrier Styrian Spirit has filed for bankruptcy protection but prospects for the carrier appear bleak as it prepares to lay off all 152 staff members.
The Graz-based airline suspended operations today after failing to secure fresh financing.
Karnten Tourismus Holding is a key Styrian shareholder. Chief executive Reinhard Zechner says: “This is the end of the airline. People have lost their jobs and the airline does not exist [any more]. There is no more chance.”
Formalities for the airline’s entry into bankruptcy protection will be finalised on 27 March.
Styrian yesterday failed to secure €5 million ($6 million) in funding from 1% shareholder Grazer Stadtwerke, which owns ?xml:namespace>Graz Airport, owing to the airline’s debt levels. Zechner confirms that this prompted today’s decision to stop the carrier’s operations.
Karnten Tourismus Holding has 42.85% of Styrian while 11.14% belongs to Solvenia’s Maribor Airport owner Prevent. Another 46.01% belongs to local Styrian private investors.?xml:namespace>
Styrian owns two of its aircraft – a Bombardier CRJ700 and CRJ200 – while its other three CRJ200 jets are owned by Bombardier Capital. The airline also has a Bombardier CRJ900 on order.
It earlier emerged that Styrian was, until yesterday, hoping to secure €5 million in funding from 1% shareholder Grazer Stadtwerke. But the investor, during its general assembly yesterday, decided against the move owing to the airline’s debt levels.
A Grazer Stadtwerke spokeswoman claims that the airline’s suspension of operations is “because of that, for sure”, adding: “At the general assembly our managers put on paper the research that we have performed over the last few months.
“They said that, because of all the debts of the airline, it is not possible for Grazer Stadtwerke to become a bigger shareholder now. They have such big debts that it’s impossible for us to make such a business decision.”
Styria would have needed need to invest €6 million and Salzburg Airport would have had to double its €1.5 million investment offer for Grazer Stadtwerke to have reconsidered. The spokeswoman said: “There can’t be any debts. That’s the biggest part.”
Grazer Stadtwerke also wanted a change to Styrian’s business plan, involving cutting the fleet to four aircraft and operating only from Graz via Salzburg to Stuttgart, Zurich, Paris and possibly Berlin. That would have involved axing the airline’s services via Maribo and Klagenfurt.