Fierce competition in the airline industry this year has resulted in several carriers, both large and small, filing bankruptcy and sometimes permanently shutting down their businesses.
To kick off the year, Brazil’s GOL airlines in January filed for Chapter 11 bankruptcy to reorganize in New York, asserting it was not generating enough cash to make payments on its $4.11 billion in debt from aircraft leases.
Related: Another regional airline declares bankruptcy, cuts all flights
In February, fledgling Canadian ultra low-cost airline Lynx Air obtained an initial order for creditor protection from the Court of King’s Bench of Alberta under the Companies’ Creditors Arrangement Act with plans to shut down all operations on Feb. 26 and wind down its business. The airline flew nine Boeing 737 Max 8 aircraft to 18 destinations in Canada, U.S. and Mexico.
Lynx, which provided service throughout Canada and to certain airports in the U.S. and Mexico, said it had faced significant headwinds, including rising operating costs, high fuel prices, exchange rates, increasing airport charges, and a difficult economic and regulatory environment.
The airline, which began service in April 2022, had received default notices from four creditors in February. The company listed C$429 million ($314.6 million) in assets and C$599.8 million ($439.9 million) in liabilities in its filing.
The list of small struggling regional airlines in 2024 includes Air Malta, FlyArna from Armenia, LIAT from Antigua and Barbuda, Air Vanuatu and United Caribbean Airlines from Curaçao, which either filed bankruptcy or just shut down and ceased operations.
Related: A major airline has proposed a way to get out of bankruptcy
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Universal Hydrogen shuts down after funding deals fail
Sometimes a struggling airline can affect the future of a tertiary business, such as an airplane manufacturer. In this case, a pioneer aircraft manufacturer Universal Hydrogen, which was developing hydrogen-powered jets to sell to the airline industry, ran out of cash and needed to shut down operations.
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Since launching in 2020, the company had burned through $100 million in venture capital that it had raised from investors. The Hawthorne, Calif.,-based manufacturer’s efforts to raise new financing had failed and its proposed plans to merge with Florida-based airline Silver Airways fell through, the Seattle Times reported.
The report did not indicate whether Universal Hydrogen had filed bankruptcy or planned to file.
Universal Hydrogen had reportedly sought to merge with Silver Airways with a plan to retrofit it’s aircraft with hydrogen power. Silver Airways had been losing money for the last year and was funding its operations with debt.
The hydrogen-powered aircraft developer’s CEO Mark Cousin on June 27 reportedly sent a letter to shareholders asserting that the company’s board of directors decided to wind up the firm after efforts to raise financing from new investors failed. The company was also unable to line up a buyer for the company or any other strategic exit plan. It had also failed to convince existing investors to participate in a rights offering.
Universal Hydrogen in March 2023 flew its first successful test flight of a 40-seat Dash 8 aircraft partially powered by a hydrogen fuel cell, from Moses Lake, Wash. The Dash 8 aircraft performed 13 successful flights and had transferred its testing to the Mojave Air and Space port in California, Aerospace Testing International reported.
The company was founded by CEO Paul Eremenko, a former Airbus Chief Investment Officer, but the founder left the company at the end of April, according to the Seattle Times.
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