The story
Foundation through merger
Air Outre Mer S.A., or AOM for short, was founded in July 1987 in the French overseas département of Réunion island and began services on 28 May 1990, locally with a Dornier 228 and a overseas with a McDonnell Douglas DC-10-30. In October 1991, Air Outre Mer agreed to merge with Minerve, a French airline which was based at Orly Airport and had operated since 1975. Minerve had been the first airline to compete directly with Air Inter on the French domestic airline market by opening a Paris (Orly) - Nice route in May 1991. However, Minerve's history had been marked by clashes and restrictions imposed by the State to protect "its company Air France" (refused aircraft changes, refusal to take off in France and therefore obligation to transfer the passengers by train to Brussels, etc.).
The two companies began operating under the name AOM French Airlines, although the administrative name was "AOM-Minerve S.A.", on 1 January 1992. Throughout its existence, AOM suffered from a lack of resources, as it was owned by the CDR-Consortium de Réalisation, a financial entity tasked with selling off the former "rotten" assets of Crédit Lyonnais bank. The CDR, whose sole mission was to sell the company, made no investments in it. AOM thus remained a struggling airline, primarily due to fierce competition. Under pressure from Air France and Aéroports de Paris, it was forced to relocate the flights from Orly-Ouest (a terminal recently renovated for Air France) to the more outdated Orly-Sud terminal. AOM resisted in vain by all means (including painting "I want to stay at Orly West!" on some aircraft) for the simple reason that domestic traffic departed from Orly-Ouest, not Orly-Sud. This would have been tantamount to condemning the airline. For most of the decade, the airline fiercely competed with Air France on both the French domestic market and on the routes to the French overseas territories.
In February 1999, Swissair acquired a 49% stake in the airline as a part of its "hunter strategy". So, in 2000, it joined Swissair Group and consequentially the struggling Qualifier Group alliance. The management of Alexandre Couvelaire, head of Euralair (and friend of French president Jacques Chirac), did not prevent the company from continuing its irresistible decline.
Another merger
Due to inappropriate fleet management and overcapacity, the airline quickly accumulated huge debts and consequently ceased operations (possibly as a result of the bursting of the dot-com bubble and the early 2000s recession which followed). In late March 2001, at the initiative of Swissair Group, AOM merged the operations with Air Liberté and Air Littoral, equally ill-fated acquisitions by the declining Swiss group. In April the new company adopted the name AOM/Air Liberté However, it survived only thanks to funding from Swissair, and in May a restructuring plan involving the elimination of a third of jobs was announced. Indeed, Swissair Group, was facing financial difficulties as well. On 15 June, the company filed for bankruptcy and was placed under court supervision for three months. At the end of this period, two potential buyers came forward: Marc Rochet and Jean-Charles Corbet, an employee of the national airline. Following a standoff between management and unions, and under pressure from the then Minister of Transport, the airline was taken over in July (two months before the September 11 attacks) for a symbolic 1 €uro by Jean-Charles Corbet, an Air France pilot. In this deal, Swissair committed to paying 1.3 billion French francs starting in August to finance a restructuring that would result in the elimination of 1,405 jobs. On 22 September the airline was renamed Air Lib.
From Wikipedia’s article on AOM French Airlines, shared under CC BY-SA 4.0.4