Unable to overcome its liquidity problems, low cost carrier Germania announced that it filed for bankruptcy on February 5, 2019.
On January 10, 2019, the company already declared that it was facing financial difficulties. However, CEO Karsten Balke sounded confident, as discussions with an unnamed potential investor that wanted to support the company financially were “positive.”
But it seems that the negotiations were inconclusive, or insufficient. “Unfortunately, we were ultimately unable to bring our financing efforts to cover a short-term liquidity need to a positive conclusion,” said Balke in an official statement. A week before, the company had reported that it failed to pay its employees for January.
Germania also noted that stranded passengers who booked their flights directly with the airline would not be offered an alternative solution. Its last flights departed on the night of February 4, 2019. Eurowings, another German company, offered a 50% discount for passengers that need to be repatriated by February 17, 2019.
For now, the two subsidiaries of Germania, Swiss airline Germania Flug AG and Bulgarian Eagle should not be affected by the bankruptcy. “With us, the business continues as usual. We are on course, i.e. the ongoing winter timetable and the 2019 summer timetable will be maintained as planned, and planning for the winter of 2019/20 is already under way,” commented Urs A. Pelizzoni, board member of Germania Flug AG.
Just like a month ago, “unforeseeable events” are cited as the reason behind the need for short-term liquidity, and eventually the bankruptcy of the airline. Like Primera Air, Small Planet, VLM, and Skywork that all ceased operations in 2018, Germania was affected by fuel prices, a weak currency exchange rate and struggles with fleet renewal and maintenance. Germania was expecting an order of 25 Airbus A320neos by 2020.
The Berlin-based carrier founded in 1986 was mainly operating from Germany and Switzerland to tourist destinations around the Mediterranean Sea and the Middle East and had recently shifted its strategy from charter flights towards the low-cost market.