Air Belgium (KF, Brussels Charleroi) has transitioned from judicial reorganisation to judicial supervision called a "transfer of undertaking under judicial authority" under a new Belgian law which will see the creation of an unencumbered newco and the eventual liquidation or termination of the old company, founder and CEO Niky Terzakis has confirmed to ch-aviation.

The new legal status was validated by the Business Court of Walloon Brabant in Belgium on September 19, 2024. Meanwhile, the company will continue to operate as it has done for the past year, focusing on cargo and ACMI operations, he said.

The new law, which entered into force on September 1, 2023, provides a liquidation procedure that allows a company to transfer its assets or activities to a newco to maximise the proceeds for creditors. This allows the airline to seek new investors for the new company while a court-appointed administrator has been appointed to manage the transfer of its assets. Air Belgium has four months to find a buyer for the newco, but management aims to secure a deal within the next six weeks, according to Belgian news reports.

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 wet-leased to LOT Polish Airlines; and two B747-8F freighters owned and operated for the Chinese Hongyuan Group.

Air Belgium had been in judicial reorganisation for the past year to allow the company to reorganise and reach agreements with its creditors. On September 18, 2023, it entered into a judicial reorganisation procedure (PRJ) and announced it would cease passenger flights on October 3, 2023, and shift focus to freight and ACMI operations. On July 9, 2024, the Business Court of Walloon Brabant granted the airline's request to modify the object of the procedure which was reclassified as a "collective agreement" instead of an "amicable settlement". This reorganisation procedure was concluded on September 19, 2024.

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.

As previously reported, Air Belgium received an offer from an unnamed European investor last week who was keen to acquire all of the shares in the airline.

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).

The airline, which employs about 500 staff, accumulated losses exceeding EUR119 million since its inception in 2016. It experienced 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.

In February 2022, the airline attracted new investment from Hongyuan Group, which acquired 49% of the shares, but no new capital has been raised since then. Other shareholders include the Belgian public authority Wallonie Entreprendre (35%), the Federal Participation and Investment Company (SFPI) with 12.5%, and smaller shareholders 3T and Sabena Aerospace (SNAE).