Denmark-based Sterling Airlines declared bankrupt

Yet another airline has gone under. Sterling Airlines A/S, the low-fare carrier based in Copenhagen, Denmark, has been declared bankrupt after its Icelandic owner, Palmi Haraldsson, was hard up for cash.

The collapse of Sterling Airlines A/S, Denmark’s second largest airline by fleet size, now gets included in the list of over two dozen airlines around the world that stopped operating in 2008 because of rising fuel prices and slowing growth of traffic as the global financial crisis, which are discouraging tourists and business executives from flying.

Sterling Airlines A/S, created in September 2005 through the merger of two Danish airlines – Sterling European Airlines A/S and Maersk Air A/S – which had been bought by Icelandic investment group Fons Eignarhaldsfelag a few months before. One month after the merger, Sterling Airlines was sold to the FL Group. In December 2006, the airline was sold to Nordic Travel Holding.

Sterling Airlines A/S was forced to file for bankruptcy after it failed to find a buyer. Now, the airline faces liquidation.

It has grounded all of its 24 planes registered in Denmark, leading to hundreds of passengers getting stranded and their ravel plans wrecked.

Sterling Airlines A/S said in a statement posted on its website that the airline’s customers who had bought their tickets on the company’s website will not receive refunds. It is advising customers who bought their tickets by credit card to contact their credit-card company or bank, while people who bought tickets through travel agents should contact the travel agents concerned.

According to TV2, Norway’s largest commercial television station, as many as 40,000 customers are holding tickets that are now worthless.

Meanwhile, Norwegian Air Shuttle ASA, the budget airline based in Fornebu, Norway, said it would open offices in Copenhagen, the capital of Denmark, “to tap demand after Sterling’s collapse” and that it will add 11 routes serving Copenhagen by May 2009 and 5 routes connecting with Stockholm immediately.

In addition, Ryanair, based in Dublin, Ireland, and Europe’s biggest discount airline, is offering a 100-euro ($127) “rescue fare” for stranded passengers of Sterling Airlines A/S Sterling.

Sterling Airlines A/S explained in the statement on its website: “The plan by Palmi Haraldsson, the owner of Sterling Airlines, to provide enough capital to keep Sterling going until 2009 was undermined by the collapse of the Icelandic financial system. Negotiations have been conducted with several potential investors, but it was impossible to make ends meet. The inevitable result is that Sterling Airlines had no option but to file for bankruptcy.”