What Led To Its Bankruptcy: Primera Air

Primera Air was, at its end, a competitive low-cost Danish-Latvian airline. It was founded in Iceland and evolved into a commercial airline with European and long-haul transatlantic flights before it went bankrupt just a few years ago. It infamously left many passengers stranded with its abrupt cease of operations, but what led to its final decision?

Primera Air B737-800
What happened to Primera Air? Photo: Andy Mitchell via Wikimedia Commons

What was Primera Air?

Primera Air was an airline founded in Iceland under the name JetX in 2003. It was relatively unknown when it started out in May 2004 operating just two aircraft in Forlì, Italy. That was until a 60% share was bought by Primera Travel Group in 2006 that drastically changed the airline’s prospects.

After this point, it was renamed Primera Air and started with a few charter flights as part of holiday tours. However, noting the opportunity to make a profit on unfilled seats, the airline started offering tickets for those seats separately. It was then that Primera Air gained traction and began expanding its route network and aircraft to accommodate the demand for flight-only bookings.

Everything seemed to be working well for the airline. It operated routes to popular European destinations including Spain, Denmark, and Sweden. As well as this, it also had its foot in the door with some transatlantic routes. In 2014, it started flying to Dubai and New York.

It’s trajectory up until this point looked to serve it well but it was then hit by financial difficulties that would continue almost consistently until its demise.

Fighting off debts

In 2015, Primera Air posted its financial figures in which it calculated a loss of 22 million euros. Despite that, it continued to expand its short-haul network in an effort to stave off the debts. 2016 didn’t look any more promising from a financial standpoint, however, Primera Air tried to make it work. It focused on building out its Swedish base and offered regular flights to Rome and updated frequency on existing routes for the summer schedule of 2017.

It paid off and Primera Air experienced a boost in profits that year. This could have been the motivation that prompted Primera Air to delve into the low-cost transatlantic market. Despite the risks, Primera Air seemed confident and was due to start a transatlantic flight from Birmingham, UK to New York Newark with an Airbus A321neo. However, Airbus was working on backlogs of deliveries which meant that Primera Air did not receive its aircraft on time.

Still confident in the route, the airline leased a Boeing 757-200 from National Airlines. Another transatlantic route between Paris Charles De Gaulle and New York Newark was also affected by the late deliveries of the A321neo. It operated with a leased Boeing 767-300 from euroAtlantic Airways.

B767-300 euroAtlantic
Leasing the 767-300 from euroAtlantic among other things damaged Premia Air’s profits. Photo: Maxime via Wikimedia Commons

Speaking to Turisti, the air carrier said that at the time:

“Airbus had around 120 aircraft grounded and was unable to deliver them on time. This delay cost Primera Air over 20 million Euros, and a net loss of 40 million Euros.”

According to the airline, this was the source of its failure.

Undelivered A321neo

A321neo, Primera Air
Primera Air did eventually have A321neo but it had already accrued too much debt. Photo: Anna Zvereva via Wikimedia Commons

Primera Air cited the late delivery of the A321neo as a hindering factor in its growth. The airline has ordered six of the aircraft but they did not arrive when it needed them. As a result, the leasing of other aircraft put a strain on its finances.

However, that wasn’t the only reason. Primera Air was also unable to secure the vital funding it needed to continue its operations. Despite 2017’s profit boost, the airline had been losing capital for some years. Its plans were ambitious and it had orders for the Boeing 737 MAX 9 and Airbus A321LR but they never came to fruition. It simply didn’t have the money to sustain its ambition. Even after it had sold some of its older aircraft.

On 2nd October 2018, the airline declared itself bankrupt and left passengers making their own way back from any of its 41 destinations. It had seven aircraft at the time of collapse; two Boeing 737-800 and five Airbus A321neo.

Do you remember Primera Air? Let us know what you thought of it.