While countless licensing and legal requirements need to be secured by an airline wishing to take passengers off the ground, the most essential one is the Air Operator’s Certificate (AOC). This operating license, required for every airline, is handed out by the aviation regulatory authority of a given country.
In the United States, it is granted by the Federal Aviation Administration (FAA) and requires the airline company to prove that it has the necessary planes, staff, safety systems and financial resources to be a functioning airline.
Equivalent agencies that grant AOC licenses in other countries include the Civil Aviation Authority in the United Kingdom, Transport Canada, and Direction générale de l’aviation civile in France. International Air Transport Association (IATA) numbers show that about 30 new airlines received AOCs in 2024, a number slightly lower than in past years due to the economic downturn.
After bankruptcy of parent company, SmartLynx Estonia loses AOC license
An airline can also lose its AOC over a failed safety audit or when it is forced to shut down in bankruptcy. International airlines whose AOC licenses were recently suspended or revoked after winding down operations in the last year include Armenian Airlines, Jet.Paris, and Passaredo in Brazil, ch-aviation reported.
Other airline bankruptcies in 2025:
- Spirit Airlines (Spirit Aviation Holdings, Inc.): Filed for Chapter 11 bankruptcy for the second time on August 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:Forced to file for bankruptcy and canceled all flights in September 2025.
In November 2025, Lithuanian aviation company Aviation Solutions Group ended up shutting down all operations of the SmartLynx airline, according to FlightGlobal, amid plans to consolidate and sell off the different European branches of the charter and cargo airline.
Three AOCs for Latvia, Estonia, and Malta were subsequently sold off to Dutch hedge-fund company Stichting Break Point.
Related: Another regional airline shuts down and cancels all flights, some stranded
While the airline has not operated any flights as it undergoes a court restructuring, its future has now been formally cemented, with Estonian authorities revoking the AOC of the SmartLynx Airlines branch in the country on Dec. 18, ch-aviation reported.
SmartLynx Latvia was founded in 2012 out of Tallinn with planes provided by the wider SmartLynx Estonia parent company. After decades of operating as a wet-lease carrier with more than 120 planes, the latter entered bankruptcy proceedings with over €522,000 in tax and credit debt, according to Aerospace Global News.
SmartLynx Latvia was founded in 1993 as a charter and ACMI airline.
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The downfall of the SmartLynx brand: rising debt and low liquidity
More than €125,000 of SmartLynx’s debt was owed by the parent company to the now-defunct Estonian branch.
With the restructuring process expected to take months, at least 120 pilots, flight attendants, and other airline employees have been left without jobs, alongside any passengers affected by canceled flights.
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When the airline announced its bankruptcy last November, some of the SmartLynx employees reported not receiving their final paycheck and having to book their own plane tickets home after being left stranded in countries such as Vietnam.
“As of today, we will be ceasing our commercial operations,” SmartLynx Airlines said in a Nov. 25 statement.
“This decision comes after a thorough assessment of our situation and long-term outlook, and it was not taken lightly. We started as a small Latvian airline with big dreams, and over 33 years grew into an international family known for resilience, adaptability, and a spirit that never backed down.”