Air Belgium Faces Bankruptcy Without a Lifeline

DALLAS — Air Belgium (KF) is nearing bankruptcy again, as a court in Nivelles has granted the airline a two-week extension to secure new financial backing. 

After almost a year of creditor protection, the airline has faced a significant drop in revenue—down 40%—following its cessation of passenger flights. The company is grappling with an annual loss of €22 million and a negative equity of €69 million, requiring at least €18 million in funding to avoid collapse.

Although an interested investor has emerged, their support depends on additional backing from the Walloon government, which appears unlikely. The Walloon Region, a key shareholder in the airline, has already invested significantly, leaving little hope for further assistance.

In 2022, the scheduled and charter carrier based at Brussels Airport (BRU) had already posted a full-year loss of €44.6 million (US$49 million), blaming increases in expenses such as staff wages and fuel. As of June 2023, FK had cumulative losses of almost €92 million (US$100 million).

The airline then shifted its focus to charter and freight operations after ending passenger services in October 2023, but more was needed to stabilize its finances. The airline, which celebrated its fifth anniversary in last year, had its shareholders granting loans of €7 million to the airline in December, but it was not enough.

According to the news media L-Post, a new investor made a firm offer to inject a maximum of €14.4 million and acquire a 49% stake. However, this offer was subject to the agreement of a new strategy for the carrier and approval from the relevant authorities.

The carrier dropped unprofitable routes to the Caribbean, including Guadeloupe, Martinique, Punta Cana and Curaçao. During this time, management believed that the KF could return to profitability by Q3 2023 by focusing on passenger, cargo and ACMI operations. The carrier also planned on introducing new flights to the United States and Asia.

Alas, the airline’s inconsistency in route planning and frequent cancellations of scheduled passenger services led to poor performance and low load factors in 2024.

Despite early interest from Sichuan Airlines (3U), which ultimately withdrew, a new unnamed investor has shown potential, providing the airline a brief extension until September 19. However, KF's future remains uncertain without additional government support or fresh capital. 

It remains to be seen what will happen in two-week's time, but the KF's challenges are compounded by historical operational inconsistencies and poor route choices, further jeopardizing its chances of survival.