Primera Air goes bust

Nordic low-fare carrier Primera Air has suspended operations and will enter into bankruptcy proceedings, blaming financing problems and Airbus delivery delays.

The airline, in operation for 14 years, has grounded its fleet of nine aircraft, a mixture of Airbus A321neos and Boeing 737-800s and 700s. The carrier mainly flew between Nordic countries and mainland Europe, but earlier this year began flying budget long-haul routes to the east coast of the US.

After failing to secure funding to keep its operations running, the airline announced it was ceasing operations at midnight on Monday 1 October, stating on its website: “We would like to thank you for your loyalty. On this sad day we are saying Goodbye to all of you.”

It blamed “several unforeseen events” which had cost “significant amounts of money”. The statement also noted that these unforeseen costs, coupled with the challenging current environment airlines are facing due to higher fuel costs were integral to its collapse. Indications of impending problems arose earlier this year when it dropped a route from Birmingham Airport in the UK to Boston and Newark in the US, and from London Stansted to Toronto in Canada following poor sales.

It had announced in September that it would be scrapping all long and short-haul flights out of Birmingham as of the end of this month.

Primera had ambitious growth plans in place, and had placed an order for new B737 MAX 9 aircraft, due for delivery starting next year. The airline, part of Primera Travel Group headquartered in Riga, Latvia, had both Latvian and Danish air operator certificates. The carrier had previously spoken about its ambition to have a fleet of 35 narrowbodies by 2021, including A321neos, long-range versions of A321neos and MAX 9s, split between leased and owned aircraft.

As recently as last month it was also announcing plans for new routes from Frankfurt, Brussels, Berlin and Madrid to the US, and carried more than one million passengers last year.

“The company has been working relentlessly during the last months to secure the long-term financing of the airline,” its board said in a statement. “Not being able to reach an agreement with our bank for a bridge financing, we had no other choice than filing for bankruptcy.”

The airline said specifically that the 2017 loss from service of an aircraft from operations due to severe corrosion problems was followed by the cost of rebuilding, resulting in a loss of more than €10 million ($11.6 million).

“2018 began with a fantastic start of our low-cost, long-haul project with a brand-new Airbus 321neo fleet; however, due to severe delays of aircraft deliveries this ended up being rocky and incredibly problematic: operational issues, cancellations of a number of flights and loss of revenues are just a few to mention,” it stated.

Primera had to wet lease additional aircraft to fulfil passenger obligations, creating additional costs of over €20 million, it added. In deciding when to end operations, the airline weighed potential losses because of future delivery delays, the added exposure to partners and lessors, as well as the broader airline environment of low prices and high fuel costs, and concluded it would have a smaller effect on clients at this time of year.

“Without additional financing, we do not see any possibility to continue our operations,” the LCC said.

An internal e-mail from Anders Ludvigsson, Primera’s director of operations, was leaked and shared online, stating that travel arrangements would be made for flight crews located away from their operating bases.

The collapse of Primera comes a year after the failure of Monarch Airlines and Air Berlin.

 

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