05
Oct

Primera Air blames ‘several unforeseen misfortunate events’ for its collapse, but did it take a risk too many in entering the competitive trans-Atlantic market?

The European carrier Primera Air surprised everybody when it burst into the trans-Atlantic market earlier this year. After over a decade serving mainly Mediterranean markets from the Nordics and Baltics, the airline launched flights this summer from new bases in Birmingham, London Stansted and Paris Charles de Gaulle to destinations in North America. In recent weeks it had revealed plans to also introduce trans-Atlantic flights from Berlin, Brussels and Madrid, but instead it has this week filed for bankruptcy, certainly a victim of external factors, but also perhaps of an overambitious business strategy.

The fact that CAPA’s team of analysts were this week debating whether the airline should be classified as a ‘Low Cost’ or ‘Mainline’ carrier due to its ‘low fare, high quality’ model perhaps helps explain why almost a year on from the collapse of airberlin and Monarch Airlines that we are discussing the collapse of another European carrier. While known within the industry having first been established as JetX in Iceland back in 2009 and latterly operating with Danish and then Latvian licences as part of the Primera Travel Group conglomerate of Scandinavian travel agencies and tour operators, it unfortunately had limited brand recognition outside of its core markets.

Therefore, when it revealed ambitious plans to acquire a small fleet of modern generation short-haul airliners and utilise them on flights across the trans-Atlantic, it was met with surprise. Unfortunately, and despite strong marketing, the ambitious strategy to be one of the first movers in this marketplace and deliver its own interpretation on the emerging low cost long haul model, did not translate into bookings and low demand quickly saw flights from Birmingham reduced and then cancelled entirely.

Its strategy was brave and it was always a question if its low fare, high quality model would stimulate demand enough for it to compete some well-established operators in the highly competitive market. While easier to fill an Airbus A320 or A321 than a widebody, the airline was restricted to heavy point-to-point markets without the strength of the feed enjoyed by its network rivals. APD out of the UK would also have been a factor as it endeavoured to provide the low fares required to stimulate the market, and rising costs, including fuel may not have been factored correctly into the plan.

READ MORE via The Blue Swan DailyPrimera Air blames ‘several unforeseen misfortunate events’ for its collapse, but did it take a risk too many in entering the competitive trans-Atlantic market?