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DENMARK. Copenhagen-based low-cost carrier Sterling Airways has filed for bankruptcy and cancelled all its operations, leaving thousands of passengers stranded across Europe. The company is owned by Northern Travel Holdings of Iceland, which blamed the meltdown of Iceland’s financial system for its collapse.
The company said it had battled to keep the business afloat during recent weeks, but that it had been forced to file for bankruptcy.
In a statement it said: “With the global financial recession that started in the autumn of 2007, by winter 2007/08 Sterling was seeing signs of stagnation in the market. Significant fuel cost increases, and at the same time a planned heavy expansion of our activities, made us more exposed than we would have been otherwise.
“By spring 2008 the airline industry was hit by decreasing demand and rapidly increasing fuel prices. That led to Sterling accumulating large losses. During summer and autumn the management implemented a restructuring plan resulting in a reduction in fleet and manpower, and a pull-out of a lot of loss-making activities, without compromising our services. The full effect of these actions were planned to have impact start of 2009.
“To get the company restructured the shareholder of Sterling gave financial support from the end of July 2008 to the end of September 2008. The plan was to continue financial support into 2009. On 29 September the Icelandic financial environment started to collapse. Over three to four weeks, the whole financial system melted down, and that resulted in our shareholder being unable to continue his support to the company. Negotiations have been conducted with several potential investors, but it was impossible to make ends meet. The inevitable result is that Sterling Airlines A/S has no option but to file for bankruptcy.
“Sterling Airlines’ trademark has always been excellent staff and service. Among the staff the Sterling spirit will continue to exist. We have made our mistakes over the years, but hopefully we have done more right than wrong, and at least we have made the market more competitive to the benefit of our customers.”
Sterling is among a number of airlines that have failed in recent months. Others include XL Airways and Zoom Airlines.
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