Yesterday afternoon, news broke that the Nordic low-cost airline, Primera Air had crashed into insolvency. The airline, which in recent years had tried to emulate the likes of Norwegian and WOW Air with long-haul routes, had to stop operations immediately. At the time of writing, between 2,500-5,000 passengers have been left stranded with no options of redress immediately available.
Many analysts had seen the writing on the wall for some time. Primera’s business strategy seemed incoherent to say the least – it had a history of announcing route launches only to then cancel them at the last minute.
The carrier was struggling with low yields (a measure of how much money an airline makes per passenger carried) and low load factors (a measure of how full a plane is) – probably in part because of the airline’s dire reputation for being completely undependable upon actually operating the flights it had sold tickets for.
In a leaked email sent to the airline’s staff, a member of the flight ops team explained:
“It is with great regret I am reaching out to you all this dark day. We have just been informed that both Primera Air Nordic and Primera Air Scandinavia will file for bankruptcy tomorrow October 2, 2018.”
“Reason I am sure are many but very high costs for the aircraft with corrosion last year as well as the delays of our new Airbuses lead to too high costs for wet lease and cancellations which in the end became too much for the airlines. Our owner was working on securing financing but was not able to in the end.”
“God knows it has not been without its challenges but thanks to all of you great colleagues it has been a real honour to be at the controls of the flight ops department.”
Primera Air had ordered five Airbus A321NEO aircraft to operate a new raft of long-haul services but deliveries were delayed due to ongoing engine issues. At one point, Airbus had around 100 aircraft parked up waiting for engines from Pratt & Witney and CFM to be delivered before they could be handed over to customers.
I feel very sorry for you, Nicolette. I'd suggest you contact your office first then talk to the British consulate in Toronto. Good luck! I'm not sure what help packages are being arranged. Did your airline have ABTA or ATOL accreditation?
— British Airways (@British_Airways) October 1, 2018
Along with stranded passengers, the airline’s cabin crew have also been left high and dry – some of the carrier’s crew took to Twitter in a desperate plea from help. In one Twitter exchange between a member of Primera cabin crew and British Airways, the UK-flag carrier simply wished the crew member “good luck”, suggesting she contact her country’s embassy for assistance.
The crew member even suggested that Primera had been unable to pay staff their wages for September.
Now, in a masterstroke of public relations goodwill, Norwegian has announced it will offer specially reduced “repatriation” fares for Primera passengers. Norwegian says the fares will be offered at around a 50% discount of the normal price on select routes. A special phone line has been set up for those affected (+47 210 16771).
Norwegian, which itself has struggled with aircraft problems and expensive wetlease operations, has been able to secure large amounts of funding while it tries to turn a profit.
Primera’s demise comes just a year after major British charter airline, Monarch went bust. Analysts have predicted a wave of airline consolidation across Europe as smaller rivals succumb to intense competition, rising oil prices and ongoing problems from aircraft and engine manufacturers.