Air Belgium, founded in 2016 and employing some 500 people, will stop passenger flights after 3 October and is applying for a judicial reorganization. Since April, Air Belgium, one of the principal shareholders of the Walloon region, has concentrated its passenger operations on two main destinations: South Africa (Johannesburg/Cape Town) and Mauritius.

The affected employees will be gradually transferred to other operations within the company. “The actual passenger business has so far proved chronically unprofitable due to increased competition and is, therefore, being discontinued,” says Air Belgium, which operates from Belgium’s main airports, namely Brussels Airport, Brussels Charleroi Airport, and Liège Airport.

More than €44 million losses in 2022

According to Air Belgium, founded by CEO Niky Terzakis, a man with experience in the cargo aviation sector, many external events have weakened the company in recent years, such as the coronavirus pandemic, the war in Ukraine, sudden rising fuel prices, and inflation.

Air Belgium suffered losses of more than 44 million euros in 2022. Cumulative losses since the start of the operations amounted to over 91,6 million euros. At the end of July, the airline said it expected to return to profitability in the current quarter, even though it had a negative equity of -41 million euros at the end of last year.

Cargo and ACMI activities are to be continued

Air Belgium’s board of directors applied for a judicial reorganization procedure through an amicable agreement to get its current debt under control and return to profitability.

There were some rumors around Air Belgium, but the change in direction was a surprise. Back in May, Terzakis, for instance, made it clear that a new business model was being worked on, solid additional financing was in place, and new destinations were being pushed forward in the Americas, Africa, and Asia.

But for now, the cargo and ACMI activities (aircraft leasing between airlines) will remain insured and operational throughout the procedure and beyond.

After all, the aim is to strengthen these two growth-generating B-to-B operations in the future. However, the company considered long-haul passenger transport as its core business.

There were two Airbus A330-200 planes for Air Belgium flights and one leasing plane. There will now be three planes for leasing, which includes the crews.

All passenger flights scheduled before 3 October 2023 will remain assured; return flights will be operated by Air Belgium or other airlines. Flights scheduled after 3 October and already paid for by passengers would be canceled and refunded on a priority basis under the procedure. The airline says it has some 20 000 flight bookings after 3 October.

Heavy government support

A comment piece in the newspaper De Tijd also said that it is incomprehensible that the government, after its previous experience in the airline sector, put money into the company.

For example, the Walloon region has 15,7 million euros in capital, 1,8 million in loans, and 3,5 million in guarantees in Air Belgium. Wallonie Enterprise owns 33% of Air Belgium’s capital but has not participated in financing rounds for over two years.

Through the investment fund FPIM, the federal government has invested 6,3 million in capital and 0,9 million in loans in the company. China’s Hongyuan, a cross-border trade integrated service provider, is the largest shareholder at 49,9%.

De Tijd said the royal family also used Air Belgium’s leasing services. For example, King Philippe and Queen Mathilde used Air Belgium aircraft, with an aircraft livery that includes the national colors and the crown, for their state visits to Congo, Lithuania, and South Africa. ”

The Walloon government vehicles saw not Lufthansa subsidiary Brussels Airlines, but Air Belgium as the only throne pretender to bankrupt Sabena,” writes De Tijd.