12/16/2009: FlyGlobespan Goes Belly up

DALLAS — Today, in 2009, Edinburgh-based Flyglobespan (Y2) went into administration, declaring bankruptcy and canceling all its scheduled flights. The company was liquidated on December 10, 2010.

The Scottish low-cost airline provided scheduled services to destinations in Europe, North America, North Africa, and South Africa from five airports throughout Scotland, England, and Ireland. Glasgow Airport (GLA), Edinburgh Airport (EDI), and Aberdeen Airport (ABZ) were its key bases. The airline's motto read, 'Award-winning airline'.

As an offshoot of the Globespan Group, Flyglobespan (a trading name for Globespan Airways Limited) was founded in November 2002. In April 2003, operations began with two Channel Express Boeing 737-300 aircraft. The flights went to five destinations in Spain, France, and Italy on services from Glasgow Prestwick Airport (PIK) and EDI.

Globespan, a tour operator based in Edinburgh with more than 30 years of experience, had already offered scheduled and charter flights, cruise, rail, and coach travel, motorhome and car rental, and hotel accommodation tailored for holidaymakers visiting destinations in Canada, the United States, and Spain.

Air Transat (TS) operated the scheduled flights, mainly to Canada, from airports across the UK, with Globespan acting as the booking agent and selling the flights under its brand. A similar arrangement was tried between EDI and Nice (NCE), in the south of France, in the summer of 2002. For Globespan, this was to prove successful and led to the creation of its own 'Flyglobespan' no-frills brand.

Initial Service, Long-Haul Operations

Within months of starting operations, the operator relocated from PIK to the larger GLA, much closer to Central Scotland's population centers. The Globespan Group bought the defunct airline operator Cougar Leasing with its Civil Aviation Authority of the United Kingdom's (CAA) Aircraft Operating Certificate (AOC) in 2004 to enable it to operate its aircraft.

With an AOC, the expansion of the new airline was rapid. New destinations, including Prague (PRG), where the airline faced competition from Czech Airlines (OK), and additional points in Spain, including the Canary Islands, were added to the network. On August 1, 2005, CSA withdrew its GLA to PRG service.

The first domestic services were launched in May 2005, with twice-daily flights from GLA and EDI to London Stansted (STN), routes already operated at much higher frequencies by the much larger low-fare carrier easyJet (U2). In February 2006, these services were withdrawn, along with plans to serve Bournemouth (BOH) from EDI.

The airline continued to expand at this time. Flights from STN began in October 2005, although in June 2006, due to low passenger numbers, a new daily service between GLA and Amsterdam (AMS), replacing the double-daily U2 service between the two cities, was withdrawn.

Flyglobespan announced its first long-haul service from GLA to Orlando Sanford International Airport (SFB) in Florida, US, on November 1, 2005. The service began in June 2006 and was operated in a three-class configuration by a Boeing 767. The three classes included 50-inch sleeper seats,' gourmet' food, and wines, including Economy, Premium Economy, and Business Class.

Throughout the summer of 2006, services in Alicante (ALC) and Malaga (AGP) were upgraded to twice a day, and Murcia (MJV) was served daily. Fuerteventura (FUE) was added to the schedule for winter 2006. Y2 launched weekly services for the summer season linking GLA with Athens (ATH) and Heraklion (HER) in May 2006.

In June 2006, after 24-hour airport operations were allowed, the airline announced plans to operate from ABZ. Tenerife (TFS), which commenced in winter 2006, was the first destination. Routes to ALC, Barcelona (BCN), Faro (FAO), MJV, Palma (PMI), and Paphos (PFO) were also announced and started in the summer of 2007.

Liverpool John Lennon Airport (LPL)l, with flights to TFS, was added to the Flyglobespan network in November 2006. Y2 also added Liverpool's first link to Hamilton/John C. Munro International Airport (YHM) in May 2007. LPL also began Y2's first long-haul flight to New York (JFK) with a Boeing 757-200 aircraft in the same month. 

Service Issues, Downfall

Sadly, after a long series of service issues, primarily due to reliability problems with the only aircraft on the route, which culminated in numerous massive service delays, Y2 announced in July that it would abandon the flight in October of the same year, just six months after the launch of the operation.

In November, flights from Manchester (MAN) to YMH began with two of the three weekly flights. It also started a three-week service on November 4, 2006, from MAN to Cape Town (CPT), South Africa, but the airline discontinued that service at the end of the 2007 summer season.

In May 2007, Flyglobespan launched new services from YHM to various destinations in the United Kingdom and Ireland, including Doncaster-Sheffield Airport (DSA), the first transatlantic scheduled flight to be operated from the airport.

Flyglobespan commenced a three-week service from Ireland West Airport Knock (NOC) to JFK in May 2007 and twice a week from Boston Logan International Airport (BOS). Some flights from NOC made unscheduled refueling stops because instead of the normal Boeing 757-200, Y2 used a Boeing 737-800. 

In July 2008, before the fall of Zoom (Z4) and XL AIrways (JN), Globespan lost the right to get credit card repayment protection from the insurance industry. From that point on, instead of paying the usual sums of cash to Globespan, the credit card clearing company E-Clear, whose CEO was Elias Elia, claimed that in some situations, passengers could make valid claims against them via the credit card companies up to six months after taking their flight. E-Clear thus kept a higher sum of money paid to Globespan by them.

By October 2009, the amount of money owed to Globespan by E-Clear was in dispute; Globespan later reported that it was £35 million. Following several meetings, Globespan asked E-Clear to agree to an independent audit of the amounts, which E-Clear turned down.

Halcyon Investments, the operating arm of an August 2008 Jersey-based trust fund, also proposed to make a significant investment in Globespan at this stage. Investors from Halcyon included Elias Elia. However, questions about the airline's future resurfaced in December 2009 when several newspapers announced that the carrier had failed to secure regulatory approval from Halcyon Investments for the funding package.

And so, on December 16, 2009, Globespan Group PLC, Globespan Airways Limited, and Alba Ground Handling Limited ceased operations and were put into administration the next day with the appointment of PricewaterhouseCoopers (PWC) as administrator. The last flight, which landed at 2230 local time on December 16, was GSM706 from Hurghada (HRG) to GLA.

On January 19, 2010, following a request from PWC, a High Court judge issued an administrative order against the credit card processing company E-Clear UK, which handled all credit card transactions with Globespan. After E-Clear UK went into administration, Bruce Cartwright, Joint Administrator, PWC, concluded that it was clear that the funds withheld from the Globespan Group were no longer there.

Featured image: Flyglobespan Boeing 757-200 at Manchester Airport.