AlbaStar Halts Flights and Files for Bankruptcy, Putting Two Irish Leases at Risk

Majorca-based charter airline AlbaStar has suspended commercial operations and is filing for voluntary bankruptcy, leaving two Boeing 737-800s leased out of Ireland caught in the insolvency. Spanish trade publications Preferente and elEconomista first reported the move, and Dublin-based lessors are now watching their exposure.

The fleet is small but the asset trail matters. AlbaStar operates five Boeing 737-800 Next Generation aircraft, and two of them sit on Irish leases: EC-NAB with AWAS and EC-MTV with Castlelake Aviation. For those lessors, a voluntary bankruptcy filing in Spain means repossessing mid-life narrowbodies (the workhorse aircraft category of short-haul aviation) and re-marketing them into a market that already has plenty of supply.

Why did the airline fold now?

CEO Oriol Hernández announced the suspension and pointed to a familiar stack of pressures. The carrier cited high accumulated debt from the Covid-19 pandemic, soaring fuel costs, and geopolitical pressures. Talks with potential investors, including a full 100% sale process, did not materialise in time.

That failure to close a deal is the mechanism here. The airline had been shopping itself since a 2024-2025 strategic push, backed by Sherpa Capital, to find a new investor or buyer. No buyer came at a workable price, and the debt overhang from the pandemic years finally outran the runway.

What was AlbaStar's business?

AlbaStar is a privately owned Spanish charter airline. Its model leaned on two revenue streams: charter and scheduled leisure flying, and wet-lease work (an arrangement where the lessor supplies the aircraft, crew and maintenance to another carrier).

Notably, AlbaStar had deployed aircraft under wet-lease agreements to Flybondi, the Argentine low-cost carrier. That gave it a foothold in long-haul-adjacent capacity markets, but evidently not enough cash to offset its European cost base. Earlier in 2026, the airline also closed its long-standing operational base at Bergamo Airport in Italy after 15 years — a retrenchment that signalled the deeper trouble well before this week's filing.

What does this mean for sellers of travel?

The immediate hit lands on charter brokers, tour operators and any programme partners holding AlbaStar capacity for the coming season. A five-aircraft operator exiting the market tightens European charter supply at the margins, particularly on Italy-Spain leisure routes where the carrier had its historical base.

For lessors, the case is a reminder that even modest lease exposure to a distressed leisure carrier carries repossession and re-marketing costs. Two Irish-registered 737-800s now need new homes, and their return timing will depend on how the Spanish bankruptcy process treats the leases.

The next signal to watch is whether any buyer emerges from the wreckage — the 100% sale process failed pre-filing, but insolvency can reset price expectations and attract bidders who wouldn't pay going-concern valuations.