LTE International Airways in mid-October became the latest Spanish leisure carrier to succumb to difficult market conditions. LTE suspended charter and scheduled flights, but continues to provide aircraft, crew, maintenance and insurance (ACMI) leasing services. Managing director Michael Harrington cited cash-flow problems and difficulties from banks as a result of the credit crunch, but was adamant that the shutdown was only temporary.
The raft of Spanish airline failures was set in motion in early September by the sudden collapse of Futura International Airways and its cargo subsidiary Flyant. The reasons given by Futura's management for the carrier's failure included a 140% increase in fuel prices, which seriously harmed the airline's profitability in the normally lucrative summer season, excess capacity in the market, the closure of Ireland's largest tour operator Budget Travel - which decimated its main market - and the cancellation of a major contract in Germany.
Spain's regional carriers have also not been immune from the economic fallout. Leon-based Embraer ERJ-145 operator LagunAir suspended its scheduled operations on 9 October, followed on 20 October by start-up FlySur, which had commenced flying only on 4 September with a single ATR 42 out of Cordoba. LagunAir says it hopes to restart when the economic situation improves.
Source: Airline Business
