Cypriot budget carrier ceases operations
Another European airline just collapsed. The Cypriot budget carrier Cobalt Air announced on October 18, 2018, it is cancelling all flights and ceasing operations after failing to reach a new financial arrangement with an investor to solve its liquidity problems. The startup will now enter administration proceedings.
Thousands of passengers woke up on the morning of October 18, 2018, to find out their travel plans with Cobalt Air have been wrecked. The Nicosia, Cyprus-based carrier released a statement on its website announcing it has suspended operations indefinitely and will be cancelling all flights as of 23:50 pm on October 17, 2018.
Cobalt also urged passengers not to go to Larnaca International Airport (LCA), its main hub. “Passengers who have un-flown tickets are instructed not to go to Larnaca Airport or any departure airport tomorrow, 18 October 2018 as no Cobalt flights will operate and no Cobalt staff will be present,” the statement reads. The carrier advises passengers to contact their credit card provider or travel agent for compensation.
It is not clear exactly how many passengers have been affected by Cobalt’s collapse. According to Cypriot newspaper Kathimerini, around 3,000 passengers per day were to travel with the airline this week. It is also estimated that by the end of the year, the company would have served a total 120,000 travelers on flights to and from Cyprus.
Eleven flights had been scheduled to arrive and eleven to depart from Larnaca Airport on October 18, 2018, including flights to Paris Charles de Gaulle Airport (CDG), France, as well as London’s Gatwick (LGW), Heathrow (LHR) and Stansted (STN) in the UK, according to flight tracking website Flightradar24.
Cyprus Transport Minister Vassiliki Anastassiadou pledged to help passengers stranded in Cyprus and overseas saying it would cover return tickets to help travellers get back to where they started from, BBC reports.
A dark cloud also hangs over the 280 staff at Cobalt Air. According to Cypriot Philenews, 60 are flight crew, 130 flight attendants and another 90 are engineering, commercial, support, etc. employees. Their fate is yet unknown.
Cobalt Air had been operating for a little of over two years before going bust. The startup launched scheduled operations on July 7, 2016, following the collapse of the state-owned Cyprus Airways, which dominated the short-haul market in Cyprus. Cobalt was able to establish its own cost-efficient service, using former staff of the bankrupt flag carrier, Airwaysmag.com writes.
Recently, however, the budget airline had been struggling in both the Cypriot and international markets. Cobalt Air CEO, Andrew Madar, pointed to seasonality as one of the carrier’s biggest challenges, Centre for Aviation (CAPA) reports. To solve the issue, the company had been planning to launch long haul flights.
Having started out with a single destination (to Athens, Greece), during 2017 and early 2018, Cobalt launched further 17 routes to a number of destinations in Europe and Asia, including Abu Dhabi, the UAE, Zürich, Switzerland, Moscow, Russia, and London-Heathrow among others. It now flew to a total of 23 destinations. The carrier serviced these routes with its all-Airbus fleet (two A319s and four A320s, according to Flightradar24).