Bankrupt in Europe: A Case Study of Three

Recent Airline Insolvencies

Pietro BENINTENDI*

This article addresses the insolvencies of Alitalia, Air Berlin and Monarch against the backdrop
of their respective national legal regimes. After a brief reconstruction of the main relevant facts
leading to the procedures, the normative backgrounds are analysed. In the three cases, the
interplay between the distinctive features of each airline insolvency and the applicable bankruptcy
laws displays some characteristics that are unique to the national legal system. It follows that
differences in laws, procedures and outcomes ultimately highlight the absence of a much needed
EU-wide coordination in dealing with airline insolvencies.

1 INTRODUCTION
A recent wave of bankruptcies has shaken the European airline industry. Several
high-profile insolvencies highlight how the aviation market is still adapting to the
increased pressures of liberalization and competition within the EU.
This article aims at analysing the features of three major insolvencies across the
Union to show that problems that are unique to an ever-increasing transnational
and European airline industry are dealt with differently across Member States
during insolvency proceedings. Such varying treatment ultimately affects competi-
tion and the establishment of a sound aviation market. Any proper intervention, at
an EU level, would require a prior analysis of the present legal frameworks.
First, the current Alitalia extraordinary administration proceeding will be used
to outline the main characteristics of the Italian bankruptcy laws as applied to
airline insolvencies. The main postulation is that the Italian system of dealing with
airline crisis has adapted to a certain extent to its character, and it is highly
dependent on ad hoc political measures.
The following part of the contribution will be devoted to investigating the
state of the Air Berlin insolvency. Again, this case study will provide the input for

*
Legal Counsel at Lufthansa Cargo in Frankfurt and Air and Space Law LL.M. graduate from Leiden
University. This article is based on the LL.M. Thesis the author submitted in fulfilment of the
requirements of the Master of Laws: Advanced Studies Programme in Air and Space Law degree,
Leiden Law School, under the invaluable supervision of Prof. Pablo Mendes de Leon. The views
expressed in this contribution are those of the author only.

Benintendi, Pietro. ‘Bankrupt in Europe: A Case Study of Three Recent Airline Insolvencies’. Air & Space
Law 44, no. 3 (2019): 241–260.
© 2019 Kluwer Law International BV, The Netherlands