19 January 2009

Baltic carrier grounded

Lithuanian Airlines - flyLAL - has ceased operations after a planned buy-out of the carrier fell through.

The airline blamed "unfair market conditions, record high oil prices and low demand" for flights this winter for its collapse.

The suspension of flights left many passengers stranded and seeking either reimbursement or alternative routes. Almost 30,000 passengers with advance bookings will be affected.

The airline, which employed 360 staff, is to file for bankruptcy in the absence of any rescue offers.

Swiss investment firm SCH Swiss Capital Holdings was due to inject $1 million to clear the airline’s debts and possibly saved from bankruptcy.

Airline chief executive Vytautas Kaikaris said: "We sincerely regret that the current situation has led to the painful decision and no other decision was found."

He added: "We decided that ceasing operations of flyLAL is the only possible decision in the current circumstances."

The final flight was from Amsterdam to Vilnius on Friday night.

A statement on the Lithuanian Airlines' website advises passengers who have paid for flights by credit card to contant their bank or credit card company.

"Mos travel insurance does not protect holders from airline insolvency, but should you have taken insurance, please contact your insurance company for clarification," the statement added.

by Phil Davies