Failed airline Spanair sets ball rolling for official closure

Spain's fourth-largest airline Spanair on Monday moved to rubber-stamp its demise by filing for protection from creditors. It will shortly seek official leave to lay off its entire 2,075-strong workforce, a move that threatens another 2,000 indirect jobs.

The cash-strapped Barcelona-based airline's abrupt decision on Friday to pull the plug on its operations also left thousands of passengers scrambling to find alternative flight arrangements, digging into their own pockets in order to do so.

The loss-making carrier had built up debt of over 300 million euros, including various loans from the regional government, its main shareholder, which is also facing a financial crunch.

The so-called labor force adjustment plan (ERE) is expected to be filed with the labor department on Wednesday. The ERE will leave workers on the street, but under bankruptcy proceedings, receivers normally give priority to unpaid wages among creditors.

But workers fear there may not be enough in the airline's coffers to even cover what's owed to the payroll. When employees at a meeting with Chairman Ferran Soriano on Monday asked if that was the case, the chairman of the defunct carrier replied: "I can't say for sure."