The chances of Astra Airlines returning to Greece’s skies a year after grounding its aircraft due to financial problems are fading. The management of the company led by chairman and chief executive Ioannis Zlatanis was supposed to be in talks with foreign investors, primarily with a Chinese company in the airline industry.
The low price of 16 million euros, which amounted to the debts of the Greek carrier, was an attractive proposition for the Chinese investors, who began talks with Astra for the acquisition of a stake in its share capital. Their aim was to turn Astra into a low-cost carrier that would operate at first using leased aircraft and then – if licensed – with airplanes belonging to the Commercial Aircraft Corporation of China (Comac).
The coronavirus crisis has already proved to be a great opportunity for the Chinese state to acquire holdings in European carriers, as in the case of the purchase of a 12.67% stake in Norwegian Air by BOC Aviation, controlled by the investment arm of Bank of China. A similar restructuring model would have applied to Astra too.
Nevertheless, the talks, which were constantly running into various uncertainties, ended in failure, in an industry where demand has declined by 66% and the estimated collective losses for 2020 run to €70 billion.
Consequently, sources say, the Civil Aviation Authority will revoke the license of the airline based in northern Greece before the end of the year. Given that Astra does not enjoy any protection from its creditors, it is vulnerable to legal action, including possible forced measures.
It also remains to be seen whether any of Astra’s creditors demand the airline’s bankruptcy, which would lead to the sell-off of its properties: These include some real estate assets and the four aircraft (over 20 years old) that it possesses.
Astra, with a staff of 150 people, has assets of €18 million and obligations of €16 million. Its expired debts exceed €6 million, most of which are owed to banks, the state, the Single Social Security Entity (EFKA), the handling companies and its own staff.