With aviation remaining one of the world’s most expensive industries to both get into and stay in business, smaller airlines periodically end up filing for bankruptcy protection or shutting down entirely after running out of money.

Airlines that ended up in bankruptcy over the last year include British regional carriers Eastern Airways and Blue Channels, Swedish carrier Braathens Aviation, and Icelandic low-cost carrier Play Airlines in a high-profile collapse that left thousands of travelers stranded in different parts of the world.

In the U.S., well-known carrier Spirit Airlines is continuing its efforts to emerge from a second bankruptcy in less than a year amid a changing low-cost airline market and rising operating costs.

Air Calédonie lays off staff, prepares to file for insolvency amid continued protests

The flag carrier for the remote French overseas territory of New Caledonia, Air Calédonie is the latest airline to make the news over its financial problems as it prepares to file for insolvency in local courts.

As first reported by French outlet Le Figaro, Air Calédonie has just placed half of its 220 employees on furlough as executives express concern that it could run out of cash reserves by April 2026.

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More Travel News: “The decision was made to preserve cash reserves,” an Air Calédone executive said to Agence France-Presse. “They will be depleted by early April.”

The dramatic spike in revenue follows a series of protests that began in cities including Maré, Lifou, and Ouvéa over the decision to move the airline’s base in the capital city of Nouméa from Magenta Airport (GEA) to La Tontouta Airport (NOU) approximately 40 kilometers away, Aero South Pacific reported.

Arguing that a rushed move will disrupt access to health care and other critical services for residents in the remote territory in the South Pacific (New Caledonia is spread across multiple islands), protesters have been blockading multiple airports and airfields on different islands since the start of March 2026.

As a result, Air Calédonie has been unable to run any of its domestic flights and now could soon face collapse.

New Caledonia is a remote French overseas territory in the South Pacific.

Will Air Calédonie collapse? The latest on the airline

Shutterstock The union representing the majority of Air Calédonie staff released a statement saying it “regretted that employees are being held hostage in a dispute between users of the islands and the government.”

A local senator involved in the protests blamed the airline for not willing to budge on keeping the current airport base until it is able to offer better connectivity to residents spread throughout multiple islands.

These airlines filed for bankruptcy in 2025:

  • Spirit Airlines (Spirit Aviation Holdings, Inc.): Filed for Chapter 11 bankruptcy for the second time on Aug. 29, 2025.
  • Ravn Alaska: Ceased operations in August 2025 after earlier Chapter 11 proceedings; shut down flights and folded into other operations such as New Pacific.
  • Corporate Air: Filed for Chapter 11 bankruptcy (restructuring) in September 2025 as part of a planned sale, according to Bondoro.
  • Play Airlines: The Reykjavik-based airline shut down operations and entered involuntary bankruptcy in September 2025.
  • Braathens Airlines: The airline was forced to file for bankruptcy and canceled all of its flights in September2025.
  • Airline to launch unusual new flight to Cayman Islands from the U.S.
  • Iranian strike hits major airport, injuries reported
  • Unexpected country is most luxurious travel destination for 2026
  • U.S. government issues sudden warning on Switzerland travel

More Travel News: Air Calédonie representatives in turn expressed hopes of resuming flights as soon as a mutually satisfactory agreement is reached.

Related: Another travel company files for bankruptcy, cancels all trips