Berlin based Germania airline has stopped all flights and applied for bankruptcy after failing to cover a "short-term liquidity problem." The carrier had been transporting over four million passengers a year.
The airline was operating 4 flights a week to Paphos Airport from from Berlin, Dusseldorf, Hamburg and Nuremberg. The airline transported around 50000 visitors to Cyprus last year.
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.
The Berlin-based company cancelled all flights and advised passengers to contact their travel agents about alternative arrangements. People who bought their tickets directly from the company "unfortunately have no claim to alternative trips," the company said.
The mid-market airline ran flights to around 60 destinations in Europe, Africa, and the Middle East, transporting more than four million passengers per year.
The company said last week that staff had not received their salaries for the entire month of January.
Germania's bankruptcy filing comes more than a year after Air Berlin became insolvent and ceased operations.
“The horror for German air travellers 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.