Switzerland’s SkyWork Airlines is the latest European airline to find its future in serious jeopardy after the Swiss Federal Office of Civil Aviation (FOCA) said it may not renew its air operator’s certificate (AOC) at the end of October.
The FOCA has serious doubts about the Swiss airlines unstable financial situation and whether or not it will be able to meet its financial commitments during the upcoming winter season. SkyWork Airlines operates to around 20 European destinations including London from its main base at Bern Airport with a fleet of Saab 2000 and Dornier 328 aircraft but they have found it increasingly difficult over the last few years to make a profit.
The FOCA has given the airline until October 31st to prove that it can meet its financial obligations over winter, or they will be forced to revoke their licence and close the airline down. If SkyWork can prove to the FOCA that they are financially stable by the end of October then they will be allowed to continue their operations.
Just like in the UK, Switzerland requires their airlines to demonstrate that they are financially sound in order to renew their AOC every year. Just like the UK Civil Aviation Authority (CAA) the FOCA closely monitor the financial projections of airlines to ensure they can continue to operate safely and successfully. In the event that the FOCA feels an airline doesn’t have sufficient funds then they will either revoke or limit an airlines AOC. This is in order to prevent an airline suddenly going bust without warning leaving governments to pick up the pieces.
The UK CAA were placed in a similar situation at the start of October when they were not satisfied that the UK based holiday airline Monarch was financially viable any longer. The many consolations between Monarch and the CAA were planned to co-inside with the airlines ATOL licence renewal at the end of September. Some may say that Monarch’s collapse was sudden but those in the aviation world had been watching the airline closely after they were nearly forced to close the year before. The intervention from the CAA meant they were able to put a rescue plan into place so that the 110,000 British Holidaymakers could be brought home quickly and efficiently. The Swiss FOCA will likely be putting a similar if not smaller plan in place should the same happen to SkyWork in a few days time.
In a statement, the FOCA says it has “intensified its monitoring activities of SkyWork and its financial situation for some time now”. SkyWork is another airline that has for a long time struggled to remain financially viable in a world were low-cost airlines continue to offer even lower priced tickets to an even greater number of destinations. Small airlines like SkyWork have continued to struggle to compete in such a difficult marketplace.
The airline which was founded 34 years ago has seen a number of recent cost-cutting exercises in the last few years to try and keep the airline afloat. They reduced their fleet back in 2014 by phasing out the larger Dash 8 Q400 aircraft and even tried to further lower costs by moving from some of their expensive city centre airports to smaller ‘out of town’ airports such as London Southend. However, these cost-cutting measures didn’t seem to work as within 12 months the airline was forced to return to London-City airport because the passenger figures had dropped dramatically.
SkyWork is the main operator from the Swiss capital, Bern but if the airline can’t prove its financial stability by the end of October they could be forced to go the same way as Air Berlin and Monarch.