The German carrier with the green and white planes with a history dating back some 30 years has halted all operations and filed for insolvency.
Germania, along with its sister maintenance company Germania Technik Brandenburg filed for insolvency in Berlin late on Monday, February 4th, 2019 with the first flight operations ending today, Tuesday 5th. The Swiss sideline company, Germania Flug AG as well as Bulgarian Eagle are not affected by the bankruptcy and will continue to operate, as Germania Flug AG board member Urs A. Pelizzoni told us, “Our flight operations are continuing as normal. Our current winter flight schedule, this year’s summer schedule and also our plans for the 2019/20 winter season are unaffected by the insolvency announced in Berlin”.
Germania had been struggling for some time, higher than anticipated fuel costs last year had hit the carrier hard, the weakening euro against the dollar also played a part in the airline’s financial woes. Having a number of maintenance issues crop up hardly helped the situation, which was almost certainly made worse by the delay in receiving new aircraft to its fleet.
In early January this year, the airline that carries some 4 millions passengers each year to over 60 destinations, admitted it had financial issues. At the time it said it was “examining various financing options to ensure its short-term liquidity needs.” A number of options were explored as the management focused on how the carrier could continue to be effective in such a competitive aviation market that is dominated by airlines with much larger corporate structures.
On January 19th it seemed like the worst was over for Germania as it looked to have found a solution to cover its short-time liquidity needs, in the promise of €15 million ($17.1 million / £13.2 million) from unnamed sources. The much needed funds were expected to arrive during the week of January 21st and the management and staff breathed a heavy sigh of relief especially as some staff had not been paid. The future of Germania as an independent medium-sized airline, at least in the short to medium term looked secured.
However, as CEO Karsten Balke explains those efforts proved fruitless and there were no alternatives for the firm, “Unfortunately, we were ultimately unable to bring our financing efforts to cover a short-term liquidity need to a positive conclusion. We very much regret that consequently, our only option was to file for insolvency. It is of course the impact that this step will have on our employees that we regret the most. All of them as a team always did their best to secure reliable and stable flight operations – even in the stressful weeks behind us. I would like to thank all of them from the bottom of my heart. I apologise to our passengers who now cannot take their Germania flight as planned.”
Passengers affected by Germania’s bankruptcy who booked their flight as part of a package holiday have been advised to contact their tour operators who will organise repatriation flights. No such luck for those that had booked directly with the airline, however, The Federal Association of the German Aviation Industry said airlines, including those in the Lufthansa Group, TUIfly and Condor, would all offer stranded Germania passengers special discounted fares to return to Germany.
With fuel prices set to rise this year and fares being driven even lower by excessive competition in the European aviation sector, particularly in the low-cost market, it is fairly safe to say Germania won’t be the only carrier filing for insolvency this year.