BERLIN (Reuters) - Holiday airline Germania collapsed on Tuesday and canceled all flights immediately, the latest to succumb to turbulence in the European airline industry as it failed to secure financing to navigate a short-term cash squeeze.

FILE PHOTO: A Germania Airbus A319-100 airplane takes off at the airport in Palma de Mallorca, Spain, July 28, 2018. REUTERS/Paul Hanna

The insolvency of the German company, which carried about 4 million passengers a year, followed the failure of Germany’s second-biggest carrier, Air Berlin, in 2017.

Britain’s Monarch Airlines and Alitalia also filed for insolvency in 2017. German charter carrier Small Planet Airlines hit financial trouble last year after an expansion drive.

Germania cited 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,” Chief Executive Officer Karsten Balke said in a statement.

The carrier’s 37 aircraft mainly flew German sun-seekers to more than 60 destinations in Europe, North Africa and the Middle East. The Berlin-based company, founded in 1986, also offered flights to less conventional destinations including Iran, Iraq and Armenia.

It said all flights had been halted overnight after it filed for bankruptcy late on Monday.

CEO APOLOGY

A spokesman for the airline’s administrators said it was unclear whether operations could resume and whether the company could continue.

CEO Balke thanked Germania’s staff and apologized to passengers who had booked directly and would not be entitled to alternative flights. A Germania spokesman declined to comment on the number of passengers or staff affected.

“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 told Reuters TV at Duesseldorf 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.

Tour operators will organize alternative travel arrangements for holidaymakers who have booked package deals, the German Travel Association (DRV) said.

Germany’s Economy Minister Peter Altmaier, a conservative, said he had no specific plans to offer help to Germania, adding the government would watch the situation closely.

The Social Democrats, junior partners in Chancellor Angela Merkel’s ruling coalition, vowed to push for creation of a European system to protect passengers in the event of bankruptcies, the Handelsblatt newspaper reported late Tuesday.

“The new EU commission and the new European parliament must tackle this urgent problem,” it quoted the party’s legal spokesman, Johannes Fechner, as saying.

FURTHER CONSOLIDATION?

“The horror for German air travelers continues,” Klaus Mueller, head of the Federation of German Consumer Organisations, said of the airline’s demise.

On Monday, Europe’s largest budget airline Ryanair, posted its first quarterly loss since 2014 and said it expects further consolidation over the next 12-18 months because of overcapacity.

It predicted a further rise in oil prices would hit smaller airlines that cannot afford to increase their oil price hedging.

Slideshow (6 Images)

In a video message on Twitter, Ryanair’s chief operating officer on Tuesday said the airline will offer Germania pilots, engineers and cabin crew “immediate” starts if they apply for vacancies in Germany, Austria and across Europe.

Germania’s financial problems emerged at the start of January when it said it was examining several financing options to secure short-term liquidity.

On Jan. 19 it said it had a commitment for 15 million euros ($17 million) in funding that would secure its medium- and long-term future, but at the end of last week it confirmed media reports that it had delayed paying wages.</s>Berlin-based airline Germania has filed for bankruptcy and cancelled all flights with immediate effect, the company said on early Tuesday.

The airline with 37 aircraft had flown mainly Mediterranean, North African and Middle Eastern holiday routes for German sun-seekers on package trips, and said it transported over four million passengers a year.

"Unfortunately, we ultimately failed to successfully complete our financing efforts to meet short-term liquidity needs," said managing director Karsten Balke in a statement.

"We very much regret that, as a consequence, we had no choice but to file for bankruptcy."

The company blamed "unforeseen developments" for its cash shortage such as "steep kerosene price increases over the summer of last year with a simultaneous fall of the euro against the US dollar" as well as a high number of technical services required by its fleet of aircraft.

Balke said that "we especially regret the impact that this step has on our employees", who had done their best to ensure reliable and stable flight operations.

"I thank you all personally and with all my heart. I apologise to passengers who can not take their Germania flight as planned," said Balke.

The ailing company, which had reported financial woes on January, said it had filed for bankruptcy with a Berlin court late on Monday and that all flights were halted overnight.

Affected passengers who booked as part of a package holiday were told to contact their tour operator for replacement flights.

"Regrettably, for passengers who purchased their ticket directly from Germania, there is no entitlement to replacement transport due to the current legal situation," the airline said.

The company's subsidiaries Swiss Germania Flug AG and Bulgarian Eagle were not affected, the statement said.

The small carrier's bankruptcy comes after Air Berlin, formerly Germany's second-largest airline, went bust in 2017 after shareholder Etihad Airways withdrew funding following years of losses.</s>Berlin — 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 last year 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 sun-seekers 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 had been 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. A Germania spokesperson declined to comment on the number of passengers or staff affected.

“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.

Tour operators will organise alternative travel arrangements for holidaymakers who have 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 of the airline’s demise.

Europe’s largest budget airline Ryanair, which on Monday posted its first quarterly loss since 2014, said it expects further consolidation in the industry over the next 12-18 months because of overcapacity. It predicted a further rise in oil prices would put the squeeze on smaller airlines that cannot afford to increase their oil price hedging.

In a video message on Twitter, Ryanair COO Peter Bellew on Tuesday said the airline will offer Germania pilots, engineers and cabin crew immediate starts if they apply for vacancies in Germany, Austria and across Europe.

Germania’s financial problems emerged at the start of January when it said it was examining several financing options to secure its short-term liquidity requirements. It said on January 19 that it had received a commitment for €15m in funding that would secure its medium- and long-term future, but at the end of last week it confirmed media reports that it had delayed paying wages. 

Reuters</s>BERLIN (Reuters) - German holiday airline Germania collapsed on Tuesday after it failed to secure financing to meet a short-term cash squeeze and said it would cancel all flights immediately.

The insolvency of Germania, which carried around 4 million passengers each year, follows on from the failure of Germany’s second-biggest airline, Air Berlin, in 2017, and underscores the turbulence in the European airlines industry.

Britain’s Monarch Airlines and Alitalia have also filed for insolvency in recent years.

Germania, founded in 1986, blamed rising fuel prices, a stronger dollar, delays in integrating new aircraft into its fleet as well as a high number of maintenance services for the cash shortage.

“Unfortunately, we were ultimately unable to bring our financing efforts to cover a short-term liquidity need to a positive conclusion,” Chief Executive Karsten Balke said in a statement.

Germania’s 37 aircraft mainly flew German sun-seekers to more than 60 destinations in Europe, North Africa and the Middle East. It said all flights had been halted overnight after it filed for bankruptcy late on Monday.

Balke thanked the airline’s staff and apologized to passengers who had booked directly with the airline who it said would not be entitled to alternative flights.

“The horror for German air travelers continues,” said Klaus Mueller, head of the Federation of German Consumer Organisations.

The Federal Association of the German Aviation Industry said airlines, including those belonging to the Lufthansa Group, TUIfly and Condor, would offer stranded Germania passengers special rates to return to Germany.

Europe’s largest budget airline Ryanair, which posted its first quarterly loss since 2014 on Monday, said it expected further consolidation in the industry over the next 12-18 months due to overcapacity.

It predicted a further rise in oil prices would put the squeeze on smaller airlines that can’t afford to increase their oil price hedging.

Germania’s own financial problems emerged at the start of January when it said it was examining several financing options to secure its short-term liquidity needs.

It said on Jan. 19 it had received a commitment for 15 million euros ($17 million) in funding that would secure its medium and long-term future, but at the end of last week it confirmed media reports that it had delayed paying wages.

Air Berlin, which served around 30 million passengers a year filed for insolvency in 2017 and ceased operations. Many of its aircraft were absorbed by bigger rival Lufthansa.($1 = 0.8763 euros)</s>File--- In this picture taken Jan.9, 2019 an aircraft of German Germania airline is parked at Schoenefeld airport near Berlin. Germania has applied for insolvency. (Bernd Settnik/dpa via AP)

BERLIN (AP) — German airline Germania grounded its planes on Tuesday after filing for insolvency as it failed to secure short-term financing to stay aloft.

The Berlin-based airline, which carried more than 4 million passengers a year on scheduled and chartered short- and medium-haul flights, blamed factors such as an increase in fuel prices last summer.

The decision came less than a month after Germania confirmed that it was in financial difficulty following what it called a "particularly challenging year" for the aviation industry. Last week, it said it hadn't yet been able to pay its employees for January.

The airline said its insolvency filing, made Monday in a Berlin court, doesn't affect two operations in other countries: Germania Flug AG in Switzerland and Bulgarian Eagle. Together with those two units, Germania operated 37 aircraft.

In its statement announcing the end of operations, the company pointed to "massive increases in fuel prices last summer and the simultaneous weakening of the euro against the U.S. dollar" as well as "considerable delays in phasing aircraft into the fleet and an unusually high number of maintenance events."

Germania said that passengers who booked flights as part of a package vacation can contact their tour operator to arrange alternative transport, but those who booked directly with the airline aren't entitled to a substitute flight.

The airline had operated since 1987. In 2016, it launched a drive to expand its fleet that saw it order 25 Airbus A320neo jets with an option for 15 more.

Germania's insolvency follows the demise in 2017 of Air Berlin, which was Germany's second-biggest airline.

Air Berlin went under after its main shareholder, Abu Dhabi-based Etihad, said it would not make any more financing available following years of unsuccessful turnaround attempts. Germany's biggest airline, Lufthansa, and budget carrier easyJet bought parts of the airline.

Lufthansa said Tuesday that it would offer discounted tickets for passengers who booked with Germania to and from Germany through the end of February.</s>German airline Germania said on Tuesday it had filed for insolvency and would terminate flight operations immediately, citing rising fuel prices and a stronger dollar.

There were also delays integrating aircraft into the fleet and a high number of "maintenance events", the company said in a statement. (https://bit.ly/2MNKtkQ)

CEO Karsten Balke said it was unable to cover a short-term liquidity need.

The company advised customers to contact holiday operators to be rebooked.

"For passengers who have booked directly with Germania, there is unfortunately no entitlement to substitute carriage," Germania added.

According to its website, Germania carried more than four million passengers a year and has a fleet of 37 aircraft.

Air Berlin, which served around 30 million passengers a year and was Germany's second-largest carrier, in 2017 filed for insolvency and ceased operations.

Many of its aircraft were absorbed by bigger rival Lufthansa.</s>The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.

BERLIN (AP) — German airline Germania filed for insolvency Tuesday and grounded its planes after failing to secure short-term financing to stay aloft.

The Berlin-based airline, which carried more than 4 million passengers a year on scheduled and chartered short- and medium-haul flights, blamed factors such as an increase in fuel prices last summer.

The decision came less than a month after Germania announced that it was in financial difficulty following what it called a “particularly challenging year” for the aviation industry. Last week, it said it hadn’t yet been able to pay its employees for January.

The airline said its insolvency filing, made Monday in a Berlin court, doesn’t affect two operations in other countries: Germania Flug AG in Switzerland and Bulgarian Eagle. Together with those two units, Germania operated 37 aircraft.

In its statement announcing the end of operations, the company pointed to “massive increases in fuel prices last summer and the simultaneous weakening of the euro against the U.S. dollar” as well as “considerable delays in phasing aircraft into the fleet and an unusually high number of maintenance events.”

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Germania said that passengers who booked flights as part of a package vacation can contact their tour operator to arrange alternative transport, but those who booked directly with the airline aren’t entitled to a substitute flight.

The airline had operated since 1987. In 2016, it launched a drive to expand its fleet that saw it order 25 Airbus A320neo jets with an option for 15 more.

Germania’s insolvency follows the demise in 2017 of Air Berlin, which was Germany’s second-biggest airline.

Air Berlin went under after its main shareholder, Abu Dhabi-based Etihad, said it would not make any more financing available following years of unsuccessful turnaround attempts. Germany’s biggest carrier, Lufthansa, and budget carrier easyJet bought parts of the airline.

The Associated Press contributed to this report.

We are committed to truth and accuracy in all of our journalism. Read our editorial standards.</s>German holiday airline Germania collapsed on Tuesday after it failed to secure financing to meet a short-term cash squeeze and said it would cancel all flights immediately.

The insolvency of Germania, which carried around 4 million passengers each year, follows on from the failure of Germany's second-biggest airline, Air Berlin, in 2017, and underscores the turbulence in the European airlines industry.

The Berlin-based airline, which carried more than 4 million passengers a year on scheduled and chartered short- and medium-haul flights, blamed factors such as an increase in fuel prices last summer.

The decision came less than a month after Germania confirmed that it was in financial difficulty following what it called a "particularly challenging year" for the aviation industry. Last week, it said it hadn't yet been able to pay its employees for January.

The airline said its insolvency filing, made Monday in a Berlin court, doesn't affect two operations in other countries: Germania Flug AG in Switzerland and Bulgarian Eagle. Together with those two units, Germania operated 37 aircraft.

In its statement announcing the end of operations, the company pointed to "massive increases in fuel prices last summer and the simultaneous weakening of the euro against the U.S. dollar" as well as "considerable delays in phasing aircraft into the fleet and an unusually high number of maintenance events."

Germania said that passengers who booked flights as part of a package vacation can contact their tour operator to arrange alternative transport, but those who booked directly with the airline aren't entitled to a substitute flight.

The airline had operated since 1987. In 2016, it launched a drive to expand its fleet that saw it order 25 Airbus A320neo jets with an option for 15 more.

Germania's insolvency follows the demise in 2017 of Air Berlin, which was Germany's second-biggest airline.

Air Berlin went under after its main shareholder, Abu Dhabi-based Etihad, said it would not make any more financing available following years of unsuccessful turnaround attempts. Germany's biggest airline, Lufthansa, and budget carrier easyJet bought parts of the airline.

Lufthansa said Tuesday that it would offer discounted tickets for passengers who booked with Germania to and from Germany through the end of February.
German airline Germania declares bankruptcy and ceases operations, cancelling all flights immediately.