3/8/1991: The Collapse of Air Europe
History

3/8/1991: The Collapse of Air Europe

DALLAS – Today in Aviation, Air Europe (AE), one of the United Kingdom’s biggest independent airlines, ceased operations in 1991.

Air Europe’s collapse left 25,000 customers stranded, and 4,000 people lost their jobs. Passenger numbers had dropped dramatically due to a deep economic recession in the UK and Europe, falling 55% for the 1991 summer season.

Additionally, rapid expansion, a lack of tangible assets, and the airline’s high-risk strategy had failed, leaving the business massively overextended.

By 1982 the airline had opened bases at Manchester (MAN) and Cardiff (CWL) and operated seven Boeing 737-200 Advanced. (Photo: Pedro Aragão, CC BY-SA 3.0 GFDL, via Wikimedia Commons)

Early Days


AE took the air on May 4, 1979. The airline had been established a year earlier to fill the gap in the European charter market. This followed Laker Airways (GK) and British Caledonian’s (BR) decision to focus solely on their schedule operations.

On July 2, 1982 Air Europe signed an agreement for two Rolls-Royce powered Boeing 757-200s. The first example arrived in April 1983.

AE launched Extended Range Twin Operations (ETOPS) to the United States, Central and South America, the Caribbean and Asia using its 757s in March 1988. The airline was an ETOPS pioneer. It worked closely with fellow British 757 operator Monarch (MON) to gain approval for their aircraft.

AE was one of the pioneers of ETOPS, working closely with fellow British 757 operator Monarch (MON) to gain approval for their aircraft. (Photo: Pedro Aragao, CC BY-SA 3.0 GFDL, via Wikimedia Commons)

Taking on the Big Boys


The scheduled market was entered on May 2, 1985 between LGW and Palma (PMI). By 1989, AE operated 150 scheduled services per week across 16 routes, competing directly with established flag carriers. Thanks to its high aircraft utilisation and lower labour costs, AE was able to undercut its rivals and offer attractive fares to passengers.

However, its plan to break into the long-haul scheduled market proved challenging. In 1990 the airline became a launch customer of the McDonnell Douglas MD-11. The goal was to use the aircraft on year-round scheduled flights to Canada, the US, Mexico, the Caribbean, Australia and New Zealand.

Sadly, McD never delivered the type. Despite being the number one airline at LGW in the summer of 1990, holding 20% of all take-off and landing slots and operating more short-haul services than any other airline, a year later, AE had been consigned to the history books.


Featured image: The first of four brand new 162-seat Boeing 737-400s arrived on April 14, 1989. Photo: Aero Icarus from Zürich, Switzerland, CC BY-SA 2.0, via Wikimedia Commons

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Writer, aviation fanatic, plant geek and part-time Flight Attendant for a UK based airline. Based in Liverpool, United Kingdom.
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