September 2007. The credit crunch in the US was only starting to make waves and although oil prices were pushing $80 a barrel, SkyEurope announced ambitious plans to make Sofia one of its regional hubs.

"Bulgaria is one of the key markets for SkyEurope and the airline wants to develop Sofia as its future base," the low-cost airline’s chief commercial officer at the time, Karim Makhlouf, told a news conference in Sofia. SkyEurope would break the monopoly of Austrian Airlines and Bulgaria Air on the route to Vienna, targetting business travellers with quality offers, he said. Relocation of some of its key operations to Sofia was a cornerstone of SkyEurope’s restructuring plan, which aimed to turn the company to profit for the first time ever.

Just 21 months later, SkyEurope said on June 22 that a Bratislava court had granted the airline creditor protection while it restructured its debts. "There has been ongoing investor interest in SkyEurope and its business plan, although the company’s debt has been a barrier," the company said in a statement. "This period of reorganisation under creditor protection will give the company time to restructure its debt and become attractive for new equity investment."

Under Slovak law, companies have up to nine-and-a-half months to complete reorganisation under creditor protection, but the company said it hoped to find new investors and complete the reorganisation as soon as possible.

The process would not have an impact on the company’s operations, with regular and chartered flights operations unaffected, according to company officials. "This is a good step for SkyEurope because it means we will be able to operate without any disruption while we implement our reorganisation," chief executive Jason Bitter said in the company statement.

A day later, however, one of its fleet of 15 aircraft was confiscated at the Paris-Orly airport for overdue payments, in accordance with a local court decision. The airport initially said that it would release the jet, but then went back on its decision. SkyEurope plans to take legal action against Paris-Orly’s decision and said it has arranged "compensatory capacities" to make up for all affected flights, Austrian news agency APA reported.

Since it started operations in 2002, the low-fare airline has not reported net profit once, but its losses were made worse by the global economic slowdown and declining traveller numbers worldwide. Its loss in the fiscal year ending in September 2008 was 19 million euro, up from 15.7 million euro the previous year.

But the company said it was on track to improve performance, having restructured "its bases and route network in order to simplify operations, improve aircraft and crew utilisation, and reduce its cost base. The cost benefits of this strategy are being realised."

SkyEurope now operates flights between Sofia and Vienna, Brussels, Amsterdam, Lisbon and Venice. It also offers flights between Bourgas on the Black Sea coast and Vienna, Prague and Bratislava.