Air Belgium (KF, Brussels Charleroi) has filed for judicial reorganisation through an amicable agreement - a form of bankruptcy protection - to address its debts and restructure. It will end its "chronically" unprofitable scheduled passenger operations on October 3 and focus on more viable cargo and ACMI business, the airline said in a statement.
It has petitioned the Nivelles Enterprise Court in Walloon Brabant to initiate judicial reorganisation proceedings, which the court will review in the coming days. If approved, this will allow the company to negotiate with creditors to reduce debt, potentially through more favourable terms, partial debt reduction, and interest deferrals. The aim is to reorganise the company's operations by discontinuing unprofitable activities with no future viability, ensuring long-term stability without affecting the legal entity.
While passenger flights scheduled before October 3 will still operate, those booked after that will be cancelled and refunded. Employees in the passenger segment will be reassigned to other roles within the company, as cargo and ACMI operations will continue during the reorganisation.
The airline said the decision was made at a board meeting on September 18, during which the company's development strategy was reviewed. The directors concluded that making a profit on passenger schedules would require substantial investments in addition to those already made in recent years, which would be impossible.
No mention was made in the statement about a reported offer from an unnamed European investor last week who was keen to acquire all of the shares in the airline. The proposal was to be put to the Nivelles Enterprise Court on September 19.
The airline said the strategic pivot came after multiple setbacks including the Covid-19 pandemic, rising fuel prices, inflation, wage increases, and increased competition, severely impacting profitability.
In 2022, as Air Belgium was beginning to recover from the pandemic, the war in Ukraine spiked fuel prices and negatively affected the euro/dollar exchange rate. Rising inflation further diminished consumer purchasing power. Unable to increase passenger fares to cover these escalating costs, it cancelled flights to unprofitable, price-sensitive destinations like the Caribbean and the French West Indies, impacting the company's profitability and cash flow. From April 2023, Air Belgium focused its operations on two primary destinations, South Africa and Mauritius. Although budget forecasts anticipated a return to profitability by autumn 2023, ongoing financial challenges forced the company to reassess its strategy. It said the capacity of released passenger aircraft would be reallocated to charter and ACMI services.
Air Belgium founder and CEO Niky Terzakis recently informed the airline's 500 employees of his decision to place the company under judicial administration, saying he would request the Nivelles court to appoint a legal administrator to find a buyer for the company in its entirety or for its profitable parts. The legal process would give the company four more months to finalise a buyer while being able to continue operating, preserving as many jobs as possible and obtaining the highest possible bid.
Air Belgium had received a previous non-binding takeover bid from private investors that fell short of the EUR18 million euros (USD20 million) required for the airline's previous reorganisation plan to succeed. The previous bid was for 75% of the airline for EUR6 million (USD6.6 million), subject to the Walloon regional government (which owns 35% of the airline) injecting an additional EUR10 million (USD11.1 million).
In February 2022, the airline attracted new investment from the Chinese Hongyuan Group, which acquired 49% of the shares, but no new capital has been raised since then.
According to the ch-aviation fleets module, the fleet comprises one stored A330-200 and two A330-200(P2F) converted freighters, all leased from Altavair; two leased A330-900Ns, one of them wet-leased to LOT Polish Airlines; and two B747-8F freighters owned and operated for Hongyuan Group.
