The Irish bookmaker, Paddy Power, are well known for their rather unusual speciality bets and, for a couple of years now, they have been running a book on the next airline to close due to financial failure. Globespan was always high on the list but in the last few weeks the price dived. There is no “hot favourite” on their list at the moment but the leaders are Wizzair at 4/1, Finnair at 9/2 and Malev at 5/1.
We would not suggest using their prices as a guide to the strength of an airline because their market-makers seem to have some very strange ideas.
Finnair is 55%-owned by the Finnish government and is regarded as a national asset which is vital to the independence of the country. Whilst it has had a recent dispute with its pilots and needs to improve its figures, its results over the last few years have been better than many other airlines. It is hard to imagine the Finnish government allowing a semi-state company and strategic asset to go bankrupt.
Wizzair is a privately-owned company (in fact, it is run as a group of individual companies which operate from the different bases of the airline). The company has been very secretive about its finances though it appears that the original part of the airline is just about profitable whilst some of the newer subsidiaries are loss-making. This is hardly a suprise so, on the face of it, they appear healthy enough but until they are much more open about their finances, rumours will persist. They might well be in much better shape than is generally thought but, equally, their sudden demise would not be a major shock.
There is a definite question-mark over Malev but some of that is due to the behaviour of its Russian shareholders. The company was bought by a Russian company which went bankrupt leaving the airline partially under the control of a Russian bank. The Hungarian government has been giving the airline a helping hand but they would very much like to find a new and secure home for the airline. It seems unlikely that the Hungarian government would just walk away, especially since the airline itself appears to be getting closer to some form of recovery, but it is not impossible.
Most of the other quotes on the list are laughable but 8/1 for the small Irish regional airline Aer Arann appears tempting. A small, regional airline in a country with an economy in dire straits is, on paper, a very likely candidate for financial trouble, however well-managed it might be. The problem is, we can’t see an Irish bookmaker making a mistake on an Irish airline…