Airline collapses, grounds all flights
Holiday airline Germania collapsed on Tuesday, succumbing to wider sectoral woes after failing to secure financing to navigate a short-term cash squeeze, cancelling all flights immediately.
Holiday airline Germania collapsed on Tuesday, succumbing to wider sectoral woes after failing to secure financing to navigate a short-term cash squeeze, cancelling all flights immediately.
The insolvency of the German company, which carried 4-million passengers a year, follows the failure of Germany’s second-biggest carrier, Air Berlin, in 2017 and underscores the turbulence in the European airline industry.
Britain’s Monarch Airlines and Alitalia also filed for insolvency in 2017, with German charter carrier Small Planet Airlines hitting financial trouble in 2018 after an expansion drive.
Germania, founded in 1986, blamed its cash shortage on rising fuel prices, a stronger dollar, delays in integrating new aircraft into its fleet and high maintenance costs.
“Unfortunately, we were ultimately unable to bring our financing efforts to cover a short-term liquidity need to a positive conclusion,” CEO Karsten Balke said.
The carrier’s 37 aircraft mainly flew German sunseekers to more than 60 destinations in Europe, North Africa and the Middle East.
The Berlin-based company also offered flights to less conventional destinations, including Iran, Iraq and Armenia.
It said all flights were halted overnight after it filed for bankruptcy late on Monday.
A spokesperson for the airline’s administrators said it was unclear whether operations could resume and whether the company could continue.
Balke thanked Germania’s staff and apologised to passengers who had booked directly with the airline and would not be entitled to alternative flights.
“I have no idea whether we are going to be put on another flight or whether we can book our own new flight through another carrier. No idea,” passenger Iris Fenske said at Düsseldorf airport.
The Federal Association of the German Aviation Industry said other airlines, including Condor, Tui Group’s TUIfly and those belonging to the Lufthansa Group, would offer stranded Germania passengers special rates to return to Germany.
COMPANY BLAMES CASH SHORTAGE ON RISING FUEL PRICES, A STRONGER DOLLAR AND HIGH MAINTENANCE COSTS
Tour operators would organise alternative travel arrangements for holidaymakers who had booked package deals, the German Travel Association said.
Germany economy minister Peter Altmaier said he had no specific plans to offer help to Germania, adding that the government would watch the situation closely.
“The horror for German air travellers continues,” Klaus Mueller, head of the Federation of German Consumer Organisations, said.
Europe’s largest budget airline Ryanair, which on Monday posted its first quarterly loss since 2014, said it expected further consolidation in the industry over the next 12-18 months because of overcapacity.