Spain takes legal action against Spanair
Associated Press, Madrid/Stockholm | Sat, 01/28/2012 10:19 PM
Grounded: Spanair airplanes are seen on the tarmac at the El Prat International airport in Barcelona, Spain, on Saturday. The regional government of northeastern Catalonia says it can no longer supply struggling airline Spanair with funds to continue operating. (AP/Manu Fernandez)
The Spanish government says it is taking action against airline Spanair for allegedly committing security breaches and trampling on citizens' consumer rights by ceasing operations.
Development Minister Ana Pastor said Saturday the government was initiating proceedings which could lead to Spanair being fined €9 million (US$11.8 million) for two "serious infringements" of aviation security legislation.
Spanair said late Friday it had "taken the decision to cease operations," grounding its fleet. An estimated 22,000 passengers who had booked seats on 220 canceled flights have been left looking for alternative arrangements.
The airline, whose hub was Barcelona airport, employed around 2,000 people and used the services of some 1,200 ground staff. It stopped operating after the Spanish regional government of Catalonia announced it could no longer fund the airline.
Spanair has a fleet of 36 mainly aging aircraft and flies to 19 domestic and 24 international destinations which include Algiers in Algeria and Warsaw in Poland.
Meanwhile, Scandinavian airline group SAS AB, which has a nearly 11 percent stake in Spanair, says it will have to write down 1.7 million kronor ($250 million) after the Spanish carrier filed for bankruptcy as funds ran dry.
In the statement published late Friday, the Stockholm-headquartered group says that thanks to preparation, the write-downs - linked to outstanding debt as well as guarantees and shutdown costs of Spanair - will have only a limited effect on SAS' business.
It estimates the liquidity effect at around 200-300 million kronor. The write-down will be booked as a one-time cost.
SAS says that before nonrecurring costs, it still expects to record a profit for the full year 2011.
