Primera Air Cease Operations, Amid Bankruptcy

The low-cost long-haul airline market is a challenging area of the industry to succeed, and it seems Primera Air has become the latest victim. The transatlantic airline will cease operations and enter administration on Tuesday (October 2), its board has just confirmed.

The board said they were unable to reach an agreement with its bank, and have “been left with no choice but to file for bankruptcy.”

The airline has posted the following statement on their website — (Primera are quoting ‘today’, but the exact cease of operations becomes effective October 2 (tomorrow), at midnight). 

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Rapid Expansion 

Primera Air has a strong 14-year history, mainly as a charter airline in Scandinavia. However, the airline has undergone expansion at an incredibly fast rate over the last two years, and it’s frequently been perceived as ‘unrealistic’ given their rapid nature of opening bases, and connecting airport for the first time. The airline was keen to move away from its charter routes, and hence opened up dedicated bases (with flight crew, cabin crew, and aircraft) at Aalborg, Billund, Birmingham, Charles de Gaulle, Copenhagen, Gothenburg Landvette, Keflavík, London Stansted & Stockholm Arlanda.

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Furthermore, Primera then threw itself into the deep end of the low-cost long-haul market, a still-emerging market whereby passengers are able to book cheap tickets on long-haul routes that would typically be three times the price on traditional airline carriers. Primera’s transatlantic services from London Stansted included Washington, Boston, New York, and Toronto.

Primera Air faced did face delays in the delivery of its new Airbus aircraft, and the airline has already issued a statement to cite the Airbus aircraft delays as a main contributor to Primera’s cease in operations. While delays to the delivery of new aircraft are of course a financial headache for airlines, (given Primera had to wet-lease aircraft from other airlines), Primera’s ambitious expansion should also be considered as major contributor leading to the upcoming cease of operations. On many routes, the airline struggled with low yields and mediocre load factors, and on average, their day-to-day operations were anything but smooth, especially in the heart of the Summer period.

In the UK, the CAA has acknowledged Primera Air’s announcement, as thousands of passengers are now set to be ‘stranded’ abroad:

Primera Air has said “On this sad day we are saying Goodbye to all of you” — a sad statement to the many employees at the airline, and unnerving news to all passengers booked to fly the airline, especially to those already abroad and due to fly home with Primera Air.

In my next post, I’ll be explaining what passengers can expect now that the airline will collapse in a matter of hours.

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