Lithuania’s newest airline, Star1, which was established just over a year ago is already sinking in financial troubles.

Due to its debt to Elviria Leasing Unlimited on the single plane the company uses for its regular flights, the Star1 Boeing was withheld at Dublin airport on Tuesday, leaving almost 100 passengers stranded inside the airport for the night.

The company’s other flights also had to be rescheduled as the plane could not leave Dublin.

As if that was not enough, Vilnius International Airport addressed the court asking it to award it 1.4 million Litas in debt and penalties.

The sale of tickets in Star1‘s webpage has been frozen.

The head of the (CAA) Kestutis Auryla stated that he expects Star1‘s problems to be temporary. He revealed that Star1 Airlines are intensively looking for new financing possibilities.

He commented that such situations of debts are commonplace in airline business, but added that problems like Star1‘s arise only when the patience of the lenders is exhausted.

He said that recent company documents provided to the CAA did not reveal any critical financial state. If the ongoing investigation reveals no essential problems in the company‘s finances, the airline will be allowed to continue its operations.

However, it seems that the claim of Elviria Leasing Limited is only the first pebble of the avalanche. Another company, responsible for recovery of wages, has addressed the court to open a bankruptcy case for Star1, as one employee of the company has not received 35 thousand Litas of payments since June. According to unofficial sources, there are more employees in the company whose payments are late.

Star1 Airlines, managed by Martynas Laivys, started operating direct flights from Vilnius to London, Dublin and Barcelona in July 2009, and later added flights to Milan. It was expected to start another direction to Munich in November. 

He commented that such situations of debts are commonplace in airline business, but added that problems like Star1‘s arise only when the patience of the lenders is exhausted.

He said that recent company documents provided to the CAA did not reveal any critical financial state. If the ongoing investigation reveals no essential problems in the company‘s finances, the airline will be allowed to continue its operations.

However, it seems that the claim of Elviria Leasing Limited is only the first pebble of the avalanche. Another company, responsible for recovery of wages, has addressed the court to open a bankruptcy case for Star1, as one employee of the company has not received 35 thousand Litas of payments since June. According to unofficial sources, there are more employees in the company whose payments are late.

Star1 Airlines, managed by Martynas Laivys, started operating direct flights from Vilnius to London, Dublin and Barcelona in July 2009, and later added flights to Milan. It was expected to start another direction to Munich in November.