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Refunds? European cut-price carrier ceases operation

October 3, 2018 Headline News No Comments Email Email

 

A European cut-price transatlantic airline has suddenly stopped operating, with directors admitting that “without additional financing, we do not see any possibility to continue our operations” – but no word on refunds.

Primera Air, a Danish leisure airline owned by the Primera Travel Group, started out 14 years ago as a charter airline in Iceland and went on to provide scheduled and charter passenger services to leisure destinations, connecting Northern Europe to more than 40 destinations in the Mediterranean, Middle East and North America.

It flew transatlantic services to Newark, New Jersey; Washington; Boston and Toronto.

Primera, which operated a Boeing and Airbus fleet, was to be the launch customer of the long-range Airbus A321LR. It had seven planes in its fleet last week and reportedly had 22 more on order, including 18 B737 MAX 9s.

The airline said on its website Monday, “On this sad day we are saying Goodbye to all of you.”

It spoke of “an enormous disappointment after the incredible hard work and dedication put into building the airline”. It gave no information about refunds.

Directors said Primera couldn’t get financing from its bank and spent more than EUR 30 million leasing planes and rebuilding one with severe corrosion.

Last month, Primera was promoting new flights between Madrid and North America at astonishingly low fares, starting at EUR 149 (AUD 239).

A statement from the company’s boar of directors, issued from head office in Copenhagen, read:

Primera Air ceases operations

With a great regret, we must inform you that Primera Air will cease all operations on the midnight of October 1st, 2018 and enter administration process, after 14 years of operations.

This is a sad day for all the employees and passengers of Primera Air. The company has been working relentlessly during the last months to secure the long-term financing of the airline. Not being able to reach an agreement with our bank for a bridge financing, we had no other choice than filing for bankruptcy.

 

The statement continued:

During the last 2 years, several unforeseen misfortunate events severely affected the financial standing of Primera Air. In 2017, the company lost one aircraft from operations due to severe corrosion problems and had to bear the total cost of rebuilding, resulted in a loss of more than 10 million euros.

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 beginning ended up being rocky and incredibly problematic: operational issues, cancelations of number of flights, loss of revenues are just a few to mention. In addition, to fulfill our obligations in front of passengers, Primera Air leased in aircraft and beared additional costs of over 20 million euros.

Weighting the potential losses due to future delivery delays, and the added exposure to our partners and lessors, and bearing in mind the difficult environment that airlines are facing now due to low prices and high fuel costs, we have decided to cease operations now, where it will have a smaller effect on our clients, due to the timing of the year, rather than increasing the exposure. Without additional financing, we do not see any possibility to continue our operations.

This is an enormous disappointment after the incredible hard work and dedication put into building the airline. The company wants to sincerely thank all its employees for their hard work and dedication, its clients for years of loyal support and its suppliers for their cooperation during the years.

Sincerely, The board of Primera Air

 

Written by Peter Needham

 

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