FlyLAL-Lithuanian Airlines

flyLAL-Lithuanian Airlines (Lithuanian Airlines, Lietuvos avialinijos)
IATA ICAO Callsign
TE LIL LITHUANIAN
Founded 1991
Ceased operations 17 January 2009
Operating bases Vilnius International Airport
Focus cities Palanga International Airport
Frequent-flyer program Gintarinės mylios (Amber Miles)
Fleet size 13
Destinations 13
Headquarters Vilnius, Lithuania
Key people Vytautas Kaikaris, CEO
Website flyLAL.com
Boeing 737-500 from Lithuanian Airlines in Frankfurt, July 2005.

flyLAL-Lithuanian Airlines (also known as Lithuanian Airlines and LAL) was the national airline of Lithuania, based in Vilnius.[1] It operated domestic and international scheduled services. Its main base was Vilnius International Airport.[2]

Due to financial difficulties, flyLAL-Lithuanian Airlines suspended operations on 17 January 2009.[3][4] FlyLal's sister airline, FlyLal Charters, continues to operate normally under a separate license, although in July 2010, FlyLal Charters was rebranded as Small Planet Airlines.

History

Establishment and privatization

The airline was established as government-owned Lietuvos avialinijos on 20 September 1991, shortly after Lithuania's independence from the Soviet Union. It was organized on the basis of the Aeroflot fleet located in Vilnius (twelve Yak-42, seven Tu-134, four An-24, and three An-26).[5] During the period from 1991 to 1993, the airline reoriented its route network from the countries of the former Soviet Union to Western Europe. In December 1991, the Lithuanian Airlines sub-leased its first Boeing 737-200 from the Malév Hungarian Airlines. Six months later it was leased directly from Guinness Peat Aviation and bore registration LY–GPA.[6] From the beginning, the airline faced stiff competition with Lufthansa and Scandinavian Airlines.[5]

After a decade of a loss-making operation, abortive plans to launch a trans-Atlantic service, the widely criticized sale of landing slots at London Heathrow to cover some 20 million of USD in debt, it was privatized in 2005.[7] The airline was acquired by LAL Investicijų Valdymas, a wholly owned subsidiary of the FlyLal Group, for 27 million litas.[8] The airline was subsequently renamed as FlyLal – Lithuanian Airlines. In February 2007, FlyLal was recognized as most punctual airline at Gatwick Airport, London.[7] It had 542 employees as of March 2007.[2] As of December 2007, the airline had three Boeing 737-300, five Boeing 737-500 and four SAAB 2000 and had plans for further expansion.[9] During 2007, the number of passengers grew by 14% to 526,000.[10] In 2008, charter flight services were transferred to sister company FlyLal Charters leaving only schedules flights for FlyLal.

Bankruptcy

During 2008, flyLAL-Lithuanian Airlines suffered from price war with AirBaltic[11] and slowing of the travel industry due to the global economic crisis.[12] Despite the crisis, the number of passengers grew by 61% during 2008.[13] In December 2008, the company admitted suffering financial difficulties and debts of 86 mln litas (26.1 mln Euros). It offered 51% of its shares to the government for a symbolic sum of 1 litas in exchange for state guarantee of its debt. The government declined the offer.[14]

Shortly afterwards it was announced that 100% of the FlyLal shares would be sold to SCH Swiss Capital Holdings, an unknown company registered in December 2008.[15] The company was sold for $1 mln effective 23 January 2009.[16] The new owners agreed to advance 1 mln Euros to cover some of the debts and prevent the cancellation of FlyLal's operating licence.[16] When the advance was not received, the deal was terminated and FlyLal announced termination of its activities effective 17 January 2009. Another proposal for government bailout was rejected on January 23.[17] The bankruptcy significantly reduced the number of direct flights from Vilnius: from 28 to 14 destinations. The number of passengers in Vilnius Airport decreased by 43%.[18]

Former destinations

FlyLAL Boeing 737-500

See also

References

Media related to FlyLAL at Wikimedia Commons

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