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-   -   sad news Primera going under (https://www.pprune.org/rumours-news/613930-sad-news-primera-going-under.html)

rog747 1st Oct 2018 16:49

Sad news Primera Air going under 2/10/2018
 
Primera Air filing for insolvency tomorrow (primera Nordic and Scandinavia)

Some a/c currently impounded at STN

Condolences to the staff - many who came from Monarch

ShamrockF 1st Oct 2018 16:53

It's on their website now:
https://primeraair.com/about-us/corp...es-operations/

rog747 1st Oct 2018 17:02


Originally Posted by ShamrockF (Post 10263275)

Yes all the PR and other Press says ceases tomorrow the 2nd -

Edit - both flights ex STN today are cancelled

The a/c at STN have already been impounded

olster 1st Oct 2018 17:25

Yet they were advertising for pilots yesterday!

mattyprice4004 1st Oct 2018 17:37


Originally Posted by olster (Post 10263311)
Yet they were advertising for pilots yesterday!

I've worked for 2 businesses that have gone under - it's not over until the head honchos call time, usually meaning all processes carry on as normal until administration is announced.

At one of them, I'd been recruited the previous week!

dcoded 1st Oct 2018 17:52

There is something much larger here going on than a "badly corroded airplane" (which is one of 'reasons' the financial math did not work out)
Primera was going to face off the Danish union in court about a highly "interesting" employee setup for their cabin crew.

See the article below, unfortunately in Danish.

https://luftfart.nu/400-000-transpor...imera-ansatte/

SMT Member 1st Oct 2018 18:09

For those to whom Danish might as well be a throat disease with loose grammatical rules, the gist of the article is as follows:

Primera air had a subsidiary in the Baltics, and had out flagged most of their fleet to the Latvian register. At the same time, crews at the Riga base were placed on self-employment based contracts via an agency, on roughly half the salary and none of the benefits enjoyed by their colleagues on Danish contracts. The flights operating out of CPH were crewed by staff based in Sweden, from where they were taxied/bussed to and from CPH to commence duties. The union argued they were therefore effectively working out of CPH, and should therefore be covered by the Danish CLA. Primera disagreed, and the union booked a date with them in the DK labour court, who would with 99,9% certainty have ruled in favour of the union - there is already plenty of precedence and an EU ruling to back it up.

It's not beyond the realms of possibility, that the prospect of losing that case and subsequently having to more than double the renumeration for a large number of crews, whilst at the same time utterly undermining the out flagging exercise, played a part in the decision to declare bankruptcy. Or, in other words, they were trying to operate on the basis of a dodgy and, ultimately, unsustainable businessplan.

Feel sorry for the crew, suppose the lives of other airlines desperate for crew just got a bit easier. At least for a while.

oceancrosser 1st Oct 2018 18:30


Originally Posted by rog747 (Post 10263272)
Primera Air filing for insolvency tomorrow (primera Nordic and Scandinavia)

Some a/c currently impounded at STN

Condolences to the staff - many who came from Monarch

No, its sad the Monarch people could’nt find better employment than Primera. Hopefully they will now. However as SMT menber has shown this poor excuse for an airline will not be missed.

Flightmech 1st Oct 2018 18:57

I guess the beginning of the long haul venture out of STN using an unreliable wet-lease until the 321NEO came on line sowed the early seeds of failure. Hard to recover from reputation wise.

SMT Member 1st Oct 2018 19:09


Originally Posted by Flightmech (Post 10263404)
I guess the beginning of the long haul venture out of STN using an unreliable wet-lease until the 321NEO came on line sowed the early seeds of failure. Hard to recover from reputation wise.

They undoubtedly were severely under financed, and incapable of executing their trans-atlantic ambitions successfully. However, out of the ca. 400K pax they carried a year, roughly 280K were out of CPH on IT services on behalf of Bravo tours. They had a good reputation in that market, and I sincerely doubt your average Danish IT tourist would know the foggiest about them flying out of STN, nor be in the least affected by whatever poor publicity that yielded.

rog747 1st Oct 2018 19:32


Originally Posted by SMT Member (Post 10263418)
They undoubtedly were severely under financed, and incapable of executing their trans-atlantic ambitions successfully. However, out of the ca. 400K pax they carried a year, roughly 280K were out of CPH on IT services on behalf of Bravo tours. They had a good reputation in that market, and I sincerely doubt your average Danish IT tourist would know the foggiest about them flying out of STN, nor be in the least affected by whatever poor publicity that yielded.

I get the impression that Bravo Tours are part of the group - I wonder if they will go too - or not - I wonder who will fly for them now?

Trav a la 1st Oct 2018 19:42

Monarch went bust at 4am 2nd October 2017.

What a cruel twist.

nicolai 1st Oct 2018 20:25

I was next to some Primera crew at Stansted very recently who seemed quite excited and upbeat about their upcoming rosters and variety of destinations. Really bad news for them - I hope they can find new jobs soon. For pilots, well, Titan are really needing more crew (all their work for BA has burnt through hours scarily fast) and maybe they need cabin crew too.

Bravo Tours says they are part of Primera Travel: "Bravo Tours er en del af Primera Travel. Udover Bravo Tours i Danmark har Primera Travel også Sun Tours i Danmark, Solresor i Sverige, Primera Holidays i England, Solia i Norge og Matkavekka i Finland."

So, "Bravo Tours is a part of Primera Travel. As well as Bravo Tours in Denmark, Primera Travel also has Sun Tours in Denmark, Solresor in Sweden, Primera Holidays in England, Solia in Norway and Matkabvekka in Finland". Primera Travel and Primera Holidays UK' websites are offline. The others are still online, the Finnish with a message that says (in google translation) "Airline Primera Air will go bankrupt on October 2, 2018. Tour Operator Travel continues normally. Primera Air's flights are operated unlike the original travel program by the Small Planet airline." I'm not quite sure I get the meaning there, can anyone translate the original "Lentoyhtiö Primera Air hakeutuu konkurssiin 2.10.2018. Matkanjärjestäjä Matkavekan toiminta jatkuu normaalisti. Primera Airin lennot operoidaan alkuperäisestä matkaohjelmasta poiketen Small Planet lentoyhtiöllä." ?


Originally Posted by SMT Member (Post 10263356)
For those to whom Danish might as well be a throat disease with loose grammatical rules,

Oi, I resemble that comment :)

fokker1000 1st Oct 2018 23:10

Very sad to hear this news...
I wish all the crew, and ops staff a speedy route to a another job with a good long term future.
It was a year ago to the day that we had to get off a jet at LGW having thought be were about to push back for a night flight to 'XXX'.
Best of luck to you all.
FK10

Ventti 2nd Oct 2018 04:40


Originally Posted by nicolai (Post 10263486)
...
The others are still online, the Finnish with a message that says (in google translation) "Airline Primera Air will go bankrupt on October 2, 2018. Tour Operator Travel continues normally. Primera Air's flights are operated unlike the original travel program by the Small Planet airline." I'm not quite sure I get the meaning there, can anyone translate the original "Lentoyhtiö Primera Air hakeutuu konkurssiin 2.10.2018. Matkanjärjestäjä Matkavekan toiminta jatkuu normaalisti. Primera Airin lennot operoidaan alkuperäisestä matkaohjelmasta poiketen Small Planet lentoyhtiöllä." ?

The google translation is actually surprisingly good :-). Agency's travels continue as planned, the only change is that the flights will be operated by Small Planet.

WHBM 2nd Oct 2018 06:59

Yet another case of an operator who had rolled along for quite some years with Mediterranean holiday flights getting attracted to Transatlantic services, starting them, presenting them as extremely cheap, and finding that quite soon, big costs and cheap income, all the cash goes out of the window. Predecessors in this situation go back to Laker and even Court Line, and they are not the only ones.

msbbarratt 2nd Oct 2018 07:37


Originally Posted by WHBM (Post 10263779)
Yet another case of an operator who had rolled along for quite some years with Mediterranean holiday flights getting attracted to Transatlantic services, starting them, presenting them as extremely cheap, and finding that quite soon, big costs and cheap income, all the cash goes out of the window. Predecessors in this situation go back to Laker and even Court Line, and they are not the only ones.

Misjudging what the business costs are is quite common. Apparently a lot of restaurants fail because the forget that bread, butter, sauces, salt and pepper all cost money too. It's the little things that are too trivial to think about that stack up.

Perhaps there ought to be some kind of legal lower price limit on airline tickets, so as to protect passengers' interests. If you're selling tickets at Laker-esque prices, it seems likely you're going to go bust. If an airline is offering tickets at way too low a cost to be sustainable as a business, why is that business allowed to operate at all? I admit that that might be somewhat contentious in a free market society! For quite a lot of people buying a long haul ticket is a notable investment, and they're always going to buy the cheapest seat available. If they ploughed that much money into, say, a bank savings account and the bank went bust, they'd get their money back.

Also, at what point does an airline business collecting large sums in fares well in advance of the fly date stop being a struggling airline and starts becoming a Ponzi scheme? Of course I'm not saying that that's what's happened here with Primera, there's no evidence of that that I'm aware of. I'm merely pointing out that the way tickets are sold well in advance for large sums makes it very easy for a Ponzi-esque situation to arise, likely unintentionally. What incentive is there for senior management to call a halt at the proper moment when so long as the company is trading they're likely collecting their remuneration packages?

CaptainProp 2nd Oct 2018 08:07


If an airline is offering tickets at way too low a cost to be sustainable as a business, why is that business allowed to operate at all?
Yes, I don't think that's a bad idea. But in a way that system already exists, as the CAA should normally not award a company their AOC unless they have a viable business and enough cash to sustain the operations. Having said that, in my opinion most CAAs are in the pockets of airlines and incompetent, at best. In the country where my license was issued the CAA is known to be more of an institution where government employees who's contracts can't be cancelled are given "jobs" just to have an office to sit in.

CP

nicolai 2nd Oct 2018 08:29


Originally Posted by Ventti (Post 10263714)
The google translation is actually surprisingly good :-). Agency's travels continue as planned, the only change is that the flights will be operated by Small Planet.

I honestly thought Small Planet went bust sometime earlier this year. It makes much more sense when they're still operating!

WHBM 2nd Oct 2018 09:30


Originally Posted by msbbarratt (Post 10263792)
For quite a lot of people buying a long haul ticket is a notable investment, and they're always going to buy the cheapest seat available

This one, which regularly appears here, but also in airline boardrooms, is just not true. If it was everyone would have booked Primera and it would be BA and AA who were without revenue. But it's not. Things like corporate travel contracts, more favoured departure points, marketing presence, sophisticated yield management, premium class service, frequency, past experience, connections, and 1,001 other aspects come into play.


Also, at what point does an airline business collecting large sums in fares well in advance of the fly date stop being a struggling airline and starts becoming a Ponzi scheme?
Again, contrary to some belief, the carrier does not get the money until the trip is made. This is because the credit card company is liable to refund the money if they go under, so they (actually a financial intermediary) keep the money until the service is provided. There is no huge balance sheet amount of prepaid fares in airline accounts. This credit card approach started when such were only a minor proportion of fare payments, now it's pretty universal.


But in a way that system already exists, as the CAA should normally not award a company their AOC unless they have a viable business and enough cash to sustain the operations.
That's as maybe, but operators like this across multiple CAAs are challenging to keep up with, and one has to ask why they do this. Primera operated primarily from Copenhagen, Denmark, but were owned in Iceland and registered (this year) in Latvia, although they seem to have had no operations from that country. The aircraft registrations rolled around between these three over time. Furthermore the Transatlantic flights were principally from the UK. The traditional national CAA structure was not designed for regulating this sort of thing.

Hotel Tango 2nd Oct 2018 10:34


I honestly thought Small Planet went bust sometime earlier this year.
I think that was Small Planet Germany. As far as I know the original is still going.

PA28161 2nd Oct 2018 11:14


Originally Posted by msbbarratt (Post 10263792)
Misjudging what the business costs are is quite common. Apparently a lot of restaurants fail because the forget that bread, butter, sauces, salt and pepper all cost money too. It's the little things that are too trivial to think about that stack up.

Perhaps there ought to be some kind of legal lower price limit on airline tickets, so as to protect passengers' interests. If you're selling tickets at Laker-esque prices, it seems likely you're going to go bust. If an airline is offering tickets at way too low a cost to be sustainable as a business, why is that business allowed to operate at all? I admit that that might be somewhat contentious in a free market society! For quite a lot of people buying a long haul ticket is a notable investment, and they're always going to buy the cheapest seat available. If they ploughed that much money into, say, a bank savings account and the bank went bust, they'd get their money back.

Also, at what point does an airline business collecting large sums in fares well in advance of the fly date stop being a struggling airline and starts becoming a Ponzi scheme? Of course I'm not saying that that's what's happened here with Primera, there's no evidence of that that I'm aware of. I'm merely pointing out that the way tickets are sold well in advance for large sums makes it very easy for a Ponzi-esque situation to arise, likely unintentionally. What incentive is there for senior management to call a halt at the proper moment when so long as the company is trading they're likely collecting their remuneration packages?

Most businesses fail due to poor money management. They cannot control their costs, and greed by owners play a big part in why a business will fail. I have seen companies with full order books fail because they had little or no cash in the business; overgeared, in debt and unable to meet creditor payments on due dates. The story is all too familiar.

nicolai 2nd Oct 2018 13:01


Originally Posted by Hotel Tango (Post 10263931)
I think that was Small Planet Germany. As far as I know the original is still going.

Yes, you're right. The German subsidiary is filing for bankruptcy and restructuring, the Lithuanian parent company continues. Thanks!

Global_Global 2nd Oct 2018 13:26

That is what they call the race to the bottom.... :mad:

Chronus 2nd Oct 2018 18:48

According to SMT MEMBER, our ENT doctor, the demise of this patient is put down to that chronic condition that has reached epidemic proportions across the EU, namely the employed -self-employed- status syndrome.
Here in the UK we have already been prescribed with a serum, under the brand name of IR35 Public Sector. An improved and more effective version is expected to be ready for prescription, under the brand name IR35 Private Sector, on 29 October when the Chancellor opens his red case and commences treatment for all our ills.
I wonder whether this will ring any angelic chords on MO`s favourite instrument, the Celtic Harp.

SkodaVRS1963 2nd Oct 2018 18:48


Originally Posted by PA28161 (Post 10263956)
Most businesses fail due to poor money management

DMGT got an offer of £1bn for the regional newspaper arm of their company (it was actually £1.4bn but what's £400m between friends?) and they declined because they believed the offer was feeble.

No other offers were on the table and so six years later they sell the same arm of their company for £53m.

You couldn't make it up.

ShotOne 2nd Oct 2018 19:27

Most certainly sad news for the employees who deserve our full sympathy and help finding new jobs. Not necessarily sad for the industry as a whole; ludicrously unrealistic fares which could only possibly have been sustained by absolute rock-bottom conditions of service.

wiggy 2nd Oct 2018 20:50


Originally Posted by ShotOne (Post 10264311)
Most certainly sad news for the employees who deserve our full sympathy and help finding new jobs.

From what I’ve heard in the last few hours I gather the first priority for some of the employees is simply finding help in getting home from North America....I really hope somebody can help them out.


Blind Squirrel 2nd Oct 2018 22:52


Originally Posted by wiggy (Post 10264354)
From what I’ve heard in the last few hours I gather the first priority for some of the employees is simply finding help in getting home from North America.


Not just the employees. From the Wikipedia page:-


...many planes were in the air at the time of the decision. In many cases, passengers learned that the airline was shut down while in line to board the plane. Passengers were left without flights or refunds, and no employees left to assist.

I flew transatlantic with them in May ex STN. They struck me as a pretty chaotic operation.

wiggy 3rd Oct 2018 05:20


Not just the employees
I appreciate that but at least the customers (or at least those who had return tickets with Primera) have now been given access to agreed repatriation fares that being offered by certain operators and probably have a job to get back to

Norwegian offers repatriation fares to those affected by Primera... - Norwegian

https://www.britishairways.com/trave...b?p_faqid=7073

They may also have some protection by virtue of insurance, having used a credit card etc...


OTOH unless the situation has changed overnight crew who were in the middle of a working trip are not being offered these fares/protections.There were reports that there were/are crew members crew stranded at airports yesterday, without access to preferential fares and were struggling to get home...and of course they now have no income stream and no job to come back to.

whitelighter 3rd Oct 2018 06:07

Passengers at least will be covered by travel insurance, so should not be out of pocket regardless.

is there any kind of industry insurance crews can take out to cover this sort of thing?

45989 3rd Oct 2018 07:45

[QUOTE=Global_Global;10264045]That is what they call the race to the bottom.... :mad:[/QUOTE
Lot of bottom feeders in eastern europe

rog747 3rd Oct 2018 07:51

On another forum it seems WOW are bringing the crews back.

Nice to see BA VS and DY helping the pax get back home.

BA helped me in 1982 back home from LAX when Laker went under the day after I arrived - they happily took my now worthless staff ticket and put me in Club - Thanks BA.

WHBM 3rd Oct 2018 21:09

Can someone explain why Primera Nordic was allowed to re-register a substantial airline under Latvian CAA oversight, when it wasn't owned there, it's top management didnt come from there, it didn't operate there, and as far as I can tell its aircraft were never seen there. Oh, and it's name implied it came from some other countries to the west.

Fursty Ferret 3rd Oct 2018 21:13

My guess is that their employees knew something was going on a week ago, judging from the distracted crew trying to make a position report over the Atlantic last week. I remember at the time listening in on an HF frequency while waiting to call Gander and coming to the conclusion that I wouldn't get on a Primera Air aircraft as a passenger if you paid me.

The news yesterday perhaps fills in some of the pieces about why they didn't seem to know where they were or where they were going. My sympathy for the stranded crews.

Hussar 54 3rd Oct 2018 21:27


Originally Posted by WHBM (Post 10265263)
Can someone explain why Primera Nordic was allowed to re-register a substantial airline under Latvian CAA oversight, when it wasn't owned there, it's top management didnt come from there, it didn't operate there, and as far as I can tell its aircraft were never seen there. Oh, and it's name implied it came from some other countries to the west.

At the risk of opening wounds, which I don't mean to do as we have a different thread for exactly this topic, I think it is entirely to do with how EASA has been set up and sits above individual EU members' own CAAs. It seems Latvian CAA oversight is considered good enough but UK CAA oversight will not be. Strange but true....

Think Easyjet and their new set up in Vienna - more or less the same thing although they do operate into and out of Vienna, I suppose.

CargoOne 3rd Oct 2018 21:31


Originally Posted by WHBM (Post 10265263)
Can someone explain why Primera Nordic was allowed to re-register a substantial airline under Latvian CAA oversight, when it wasn't owned there, it's top management didnt come from there, it didn't operate there, and as far as I can tell its aircraft were never seen there. Oh, and it's name implied it came from some other countries to the west.

1. Primera Nordic is/was indeed a Latvian registered company and therefore eligible for AOC in Latvia.
2. It wasn't owned in Denmark either, it doesn't mean anything within EU & EEA. You can ask the same about Norwegian or even better SAS Ireland.
3. Its top management wasn't from Denmark either and anyway see 2) above
4. I thought they were looking to start some operations ex RIX but anyway how much SAS Ireland operates from Dublin?
5. Actually this airline was very much about Nordic countries in terms of actual operations and top management. What is wrong here?

Another poster below has mentioned ATOL - if you buy a ticket only on BA or VS you are not covered by ATOL anyway, it is a tour operators oriented scheme.

BluSdUp 4th Oct 2018 14:17

WHBM
It is the same reason as Andorra and Switzerland has a substantial Merchant Marine.
Because they can, and we let them.
Norway as the 4th biggest Nation in Shipping, lost out to these scams after the Second WW after saving the UK ( according Churchill , not me)
The thanks was Panama, Monrovia etc etc purchasing thousands of letterboxes and letting ANYONE have a Shipping licence for a small fee.
At one point we had to make a Norwegian International Shopping Registry to stop the" out - flagging " of the Norwegian fleet.
A certain BK wants the Aviation Industry to model itself after this destructive model.
After all he is a good Shipping Lawyer.

RuddertrimZero
Interesting insight.
We now have 737 and A321 that can outfly the max duty for a single crew on two sectors. ( Out and back.)
I have done a few 13 hrs, two sector days myself, long haul with a fuel-stop. Cant be used for much the next day.
Anyway
A long haul ops with the Max or the A321 is still long haul and eats crew , I suppose.
Good luck to all this winter.
Brent just hit 86,5US a barrel today.
Regards
Cpt B

WHBM 4th Oct 2018 15:22

Thank you BluSdUp. Of course, I think a good number of us here recognise and know this, as described in your initial statement.

It would maybe good if EASA, instead of giggling to themselves playing politics over post-March UK licences, were to address these issues with certain national CAAs, especially two at opposite sides of the EU, who have the approach that you describe. Isn't that sort of thing what EASA are meant to handle ?

aerodestination 4th Oct 2018 17:48


Originally Posted by RudderTrimZero (Post 10265774)
Fursty Ferret, no front line employee knew until the 11th hour I assure you. This is a new operation with the vast majority of FOs having no prior TA experience. No surprises the voice reports were a bit rough! :)

As someone who spent 6 months there (I left when the agency cocked up everything they could with my pay, contract, parking), here's my view of things:

Firstly, I think (but not sure) that the parent company purchased and owns the planes. They have either "sold" them in order to lease them back or have leased them directly to the airline. Airbus and Boeing heavily discounted the planes as they thought they had what was a trusty partner to show case their latest green-jets. If the parent company is still the owner of those planes, they can be sold for a tidy profit indeed especially because of all the delays other airlines are experiencing.

However, as posted on here by someone, Primera had some highly dodgy employment practices and were about to be handed it to them by a Danish union. Separately, the Icelandic owned, Malta based but UK head quartered employment agency that recruited and employed every person working the transatlantic operation and some Boeing pilots too (ASTA - run by the same mob that runs Mountain High) applied a very amateurish understanding of UK employment law. They screwed up by thinking they could deduct an employees annual leave provision from their contracted days off per month! That's right, pilots and cabin crew found back in June that because they requested 5 days leave, they had 5 off days missing! This sounds outrageous, but it's true and apparently quite normal in some European countries.
Because of this cockup, they had to ramp up recruitment resulting in a much higher wage bill.

The contracts were poorly worded and amateurish and a constant source of consternation. They completely forgot about parking then retrospectively advised that money would deducted from salaries to pay for airport parking. Also, there was a massive issue with overtime payments. In the first month of operation, there was going to be a mass exodus over this. In the end, when pilots and cabin crew threatened action, the agency had no choice but to accept they made a mistake by not paying crew the "double" rate that was promised in the contract. All of this dealing another blow to their projection of how much profit they as an airline would make. All in all, Primera/ASTA misjudged how much the wage bill could be.

The reality of running a longhaul operation (and I'm no expert), especially one that flies mostly throughout the night is that you exhaust the hell out of crew who end up calling in fatigued/sick. You then pay others thousands in overtime and suddenly it all becomes unaffordable. Towards the end some people were making double their basic in over time alone. Good for them, but not sustainable for the company. As a low cost operator, margins are tight and my conclusion is that the Icelandic management saw it was not going to be viable in the long term.

Rumour within the company was because of the discounts, there were limited delay penalty clauses. So the sub-chartering most likely did have a massive, unrecoverable impact. One thing's for sure. The A321Neo has no problems carrying a full load of passengers and fuel between the East Coast and Western Europe. Airbus got it right and the the 737 Max has big boots to fill. Whether or not it can fly across the pond cheaply is not just linked to how fuel efficient the aircraft is but also what the front-line (operating) staff are prepared to put up with contract/pay wise. I think we have now reached the point where airline ticket prices cannot go any lower because the human beings responsible for delivering the service want to be paid a decent wage. Finally!

Happy to be corrected by people in the know on anything I've said above.

thanks for sharing this information. Gives a good insight in what potentially went down.


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