Icelandic Cargo Airline Bluebird Nordic Shuts Down

The airline, which existed for 23 years and was acquired by Lithuanian conglomerate Avia Solutions Group in 2020, surrendered its air operator certificate to the Icelandic Civil Aviation Authority and is returning aircraft to lessors, trade publication ch-aviation first reported. 

Bluebird Nordic was a victim of rapid expansion, in response to soaring demand during the pandemic, just as the global freight market went into an 18-month cooldown. Demand hit bottom late last summer and has been on an upswing since, with five consecutive months of double-digit growth.

The airline, based at Keflavik International Airport in Reykjavik, operated four Boeing 737-400 converted freighters and three 737-800 converted freighters that were acquired in the past year. The 737-800s replaced three older 737s. A Boeing 777-200 passenger aircraft, with seats removed but no full conversion for heavy freight, is also in storage at an airfield in Spain, according to tracking site Planespotters.net.

By late 2022 Bluebird had 17 aircraft, including three 777s that were expected to eventually undergo full conversion for carrying cargo on the upper deck. Management also publicly talked about further investments in converted freighters that would bring the 737-800 fleet to 25 units. In 2023, it sought to obtain an air operator certificate in Slovakia as part of its expansion plan in Europe and expressed interest in expanding to Latin America.

At least two of the 737-800s were owned by Tokyo Century Corp. and managed by Florida-based GA Telesis. 

Bluebird Nordic provided crewed aircraft to DHL DHLGY, FedEx FDX and UPS UPS, as well as other cargo airlines. It also operated its own scheduled route between Rejkjavik and Dublin several times per week.

CEO Audrone Keinyte told ch-aviation that Bluebird went out of business because of low demand for airfreight. Global express carriers have been reducing flight activity and outsourced transportation in the past year as parcel volumes continue to shrink. UPS' international daily volume, for example, shrank 5.8% in the first quarter. Efforts to reach Keinyte or a representative from Avia Solutions Group were unsuccessful.

The freight crisis has also engulfed other all-cargo operators. In the United States, iAero, a charter operator for DHL Express and the travel industry, closed its doors last month while Amerijet is feeling the financial pinch after rushing to expand only to see customers pull back shipping requirements.

Bluebird Nordic was founded in 1999 through the merger of several companies in Iceland and began flying two years later with a single 737-300. It went by the name Bluebird Cargo until 2018.

Avia Solutions Group includes cargo airlines BBN Airlines Indonesia, SmartLynx Airlines and Magma Aviation, charter brokers Chapman Freeborn and Arcus Air Logistics, and lessor AviaAM Leasing. 

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