Airline files for bankruptcy

Regular readers might remember Indian airline Go First as the company that left 50 passengers stranded on a shuttle bus and allowed a flight to take off regardless earlier this year.

Now the budget carrier has grounded all its flights and filed for airline bankruptcy.

It said full refunds will be issued to all affected customers "shortly".

Go First says the grounding will last for three days - although it is not clear what will happen after that.

The airline has blamed long running problems with engines for its demise, saying nearly half its fleet was grounded at one stage due to engine issues, Travel Mole reports.

The airline has an all Airbus A320 fleet.

“We had to take this step due to the ever-increasing number of failing engines supplied by Pratt & Whitney,” an airline statement said.

India’s Civil Aviation Minister Jyotiraditya Scindia said: “The Government of India has been assisting the airline in every possible manner.”

Stay tuned.

Another airline bites the dust in testing times

Another established airline has gone out of business in the difficult economic period following the pandemic.

Mexican airline Aeromar announced this week it is going out of business with immediate effect, saying it has been unable to work through its financial difficulties.

The airline was founded in 1987 and operated 21 domestic routes and also flew to McAllen and Laredo in Texas, as well as Cuba. 

Aeromar operated mostly short flights to beach resorts out of Mexico City with a fleet of ATR planes. It has a workforce of about 700.

The airline had faced financial problems even before Covid.

“Measures taken were not sufficient to stabilise the company’s situation,” it said in a statement.

Other recent airline closures include British-based FlyBe, and Norwegian-based Flyr. 

More passengers left stranded as another European airline bites the dust

Hot on the heels of British-based airline FlyBe going out of business, Norwegian budget airline Flyr has shut up shop and filed for bankruptcy.

Headquartered in Oslo and based out of Oslso Airport, Gardermoen, the airline operated domestic flights as well as between Norway and over a dozen leisure destinations across Europe.

The airline was only launched in 2020 by the team behind now-defunct Norwegian flag carrier Braathens.

Earlier this week, rhe cash-strapped airline halted all flights and ticket sales.

It said it had failed to raise further cash to continue for its operations.

"There is no longer a realistic opportunity to achieve a solution for the short-term liquidity situation,” Flyr said in a statement.

“All departures and ticket sales have been cancelled.”

More than 400 employees are expected to lose their jobs.

There was no immediate advice from Flyr to passengers stranded but airlines SAS and Norwegian said they’d sell available seats at special fares for those holding Flyr tickets.

Travel insurance usually doesn’t cover disruptions caused by bankruptcies, and any claims for money lost on prepaid hotels would need to join other creditor claims to the bankruptcy trustee.

Passengers and other creditors can file their claims on the estate by email to flyr@kvale.no

Flyr operated 12 Boeing 737 aircraft to destinations including Brussels, Prague, Paris, Berlin, London Gatwick and Edinburgh.

Why Italians gave Domino's the boot

It was a fast food gamble that failed: spectacularly and quite predictably.

Who could possibly have predicted that pizza loving Italians would not be captivated by American-accented offerings from global chain Domino's.

Quite a few people, I suspect.

Domino’s Italian franchisee, EPizza, filed for bankruptcy last month, effectively ending the company’s bid to expand its presence in the country.

Domino's is an American multinational chain founded in 1960 with stores in over 83 countries. It once had plans to open as many as 880 stores in Italy by 2030.

But just as many Australian coffee lovers rejected Starbucks - the chain closed 75% of its stores Down Under in 2008 - Italians shunned Domino's and creations like its cheeseburger pizza.

GlobalData noted that despite a sizeable investment to localise its menu, Domino’s failed to recognise its inability to compete with smaller Mom and Pop businesses, which accounted for 72.6% of the quick-service restaurants (QSR) channel in Italy in 2021 and boast low-priced, high-quality menu items.

The data and analytics company noted that the company’s growth was slower than expected since it entered the Italian market in 2015 and peaked at over 100 branches, but by 2022 was left with only 29, partially due to the pandemic, but its long-term localisation strategy was the ultimate flaw.

Ramsey Baghdadi, Consumer Analyst at GlobalData, said: “The company’s strategy lacked affordable pricing to match the local businesses, and the ability to adapt quickly to changing consumer behaviour.

"This clearly shows a flaw in its plan to localise its menu to meet demands from Italian consumers.”

According to GlobalData’s latest survey, almost half (45%) of Italian consumers prefer local cuisine.

Therefore, consumers in Italy are more likely to try menu items that have locally sourced ingredients and local flavours, instead of American-inspired creations such as the Hawaiian.

This proves further that authenticity and connoisseurship play a big part in where Italian consumers decide to eat, GlobalData says.

Affordability was also a driving factor in consumer decision making, not just product quality. GlobalData’s survey also revealed that over half (55%) of Italian consumers are extremely or somewhat concerned about their financial situation due to Covid-19.

“Fellow international businesses originating in the US such as McDonald’s took a long time to make an impression in Italy," says Baghdadi.

"Foodservice providers that specialise in regional favourites such as Starbucks coffee have yet to make a demanding presence. It is clear that this falls down to the failure to develop a value proposition that beats local independent businesses in both quality and value.”

Basically, I think Italians probably prefer to enjoy their pizza in a friendly ambience with a glass of wine. And they've made that preference known.