Bankruptcy petition for historic airline

A bankruptcy petition has been filed against the historic airline Ernir. Sigurður Bjarni Jónsson, chairman of the board of Erni and Mýflug, who holds a large stake in Erni, says that assets have been sold for around 1.2 billion ISK and that there is still a debt of around 300 million ISK.

Therefore, it is somewhat bittersweet that this bankruptcy petition is coming now. The assets that have been sold are a Dornier aircraft that was sold to Germany and the company’s hangar, which was sold to Volcano Heli ehf., which operates helicopter flights from Reykjavík Airport.

“I can confirm that a bankruptcy petition has been filed against the company and the board is looking into the matter,” says Sigurður Bjarni.

Assess whether it will be possible to get further

“We’ve reduced the debt enormously, but at the same time, we’ve eliminated the flight operations. We are assessing whether we can go further,” says Sigurður Bjarni.

According to him, the company still has three planes of the Jet Stream 32 type. Two of them are unflyable, but the third is rented out, and according to Sigurðar, it is the company’s only source of income.

Ernis’ flight operating license was revoked by the Swedish Transport Agency earlier this summer.

“We have reduced Ernis’ debt by 1,200 million. Roughly speaking, about 300 million ISK are left,” says Sigurður.

Don’t you think it’s sad that this request is being made at this point?

“Of course, people think it’s bitter if we don’t find time to pay better for this. We are very sorry,” says Sigurður Bjarni.

“We have tried to be in the best possible conversation with most of our creditors. It has gone well. Many people have received us very well, but others have wanted to know little about our actions,” says Sigurður Bjarni.

54 years of history

Ernir was founded in 1970 by Herði Guðmundsson, who sold his majority ownership at the beginning of 2023. The company has operated flights to Húsavík and the Vestmanna Islands, but the service contract for these flights expired in March. In addition, the company has partially operated charter and ambulance flights. What remained was a flight to Hafnar in Hornafjörður, which Mýflug took over.

Sigurður says that after Ernir lost the air ambulance contract, good advice was expensive, but Mýflug owns about 33% of Ernir.

“We came to the Ernis issue intending to try to straighten out the finances. But then we (Mýflug) lose the air ambulance contract we have had. Then we got up with two companies. One was projectless, which was Mýflug, and the other was doing poorly financially. Now we have come a long way in establishing a company that has a mission,” says Sigurdur.