Spanair Faces Legal Action


Spain’s fourth largest airline, Spanair, has filed for bankruptcy protection, following an abrupt suspension of operations on January 27, 2012, when it is estimated that 20,000-plus passengers were left stranded after the cancellation of more than 200 flights.  According to press reports, the company’s liabilities exceed €300 million (US$397m).
Ana Pastor, Spain’s Minister for Public Works, announced at a press conference that the government would be taking legal action against the Barcelona-based airline for “two very serious breaches of the Air Safety Act.”  The ministry’s legal department is currently deciding if Articles 37.1.3 and 37.2.1 – relating to continued service and passengers’ rights – have been breached.  Such breaches could lead to a fine of €4.5m ($5.9m) each.  Ms Pastor said:  “The ministry will not rest until all responsibility is assumed by those who break the rules and abuse citizens’ rights.”
The Catalan government – which together with a group of private investors is the carrier’s majority shareholder, took over Spanair in 2009 from Scandinavian airline SAS – which still holds a 10.9% stake – and has since injected €150m ($200m) into the business.  Despite this, Spanair reported an operating loss of €115m ($150m) in 2010.
Shortly before the airline ceased operations, takeover talks with Qatar Airways fell through after months of negotiation, removing the option of further financial backing.  Press reports also suggest that the company’s actions are a result of the decline in passenger demand in Spain.
In an online statement to its passengers, Spanair claimed it was finalising an agreement with the International Air Transport Association (IATA) to facilitate the refund of purchased, but not yet flown, tickets.  The carrier apologised to its customers and offered information for alternative flights.
The government is also sorting out refunds for stranded passengers and informing them of their rights.  Many passengers have been assigned to other airlines at reduced prices.  (Picture:  Ashley French)