Primera Air's collapse brings holiday misery to 60,000 – but was the writing on the wall?

Passengers on Primera Air’s service from Birmingham to Malaga last night would have landed before they found out that their hopes of a return flight had been dashed. The airline, registered in Denmark but founded in Iceland, had three planes in the air, bound for the holiday hotspots of Malaga, Majorca and Crete, as it announced its collapse.

Those travellers are among an estimated 60,000 affected by the failure of Primera, which only last month was still announcing new routes.

The low-cost carrier’s own cabin crew were among those stranded abroad with no way to get home. “If anybody owns a jet come rescue us we’re sleeping on the floor in Toronto Airport,” wrote Loz, from Cobham, on Twitter. She added that other crew and passengers were stuck in Washington, Boston, New York, Paris and Reykjavik.

Scores of passengers were at London Stansted, awaiting flights to the US, when all services were cancelled. The airport, Primera’s UK base, has told passengers due to fly to stay at home.

Primera, which was still selling tickets on its website yesterday afternoon, said in a statement: “On this sad day we are saying goodbye to all of you. Kindly understand that the usual options for contacts can not be offered any longer.”

How will stranded passengers get home?

“It all depends on whether your booking was part of a package holiday organised by a tour operator or travel agent which is licensed by the government’s Atol scheme,” explains Telegraph Travel's chief consumer editor, Nick Trend. “If it is, you are entitled to a refund, or if stranded, an alternative flight home will be arranged for you.” However, most passengers are likely to have booked directly with Primera so won't have Atol protection. Full details of the situation regarding the failure are on the Civil Aviation Authority (CAA) website.

“If you paid by credit card (and the fare was over ￡100) you will probably be protected by Section 75 of the Consumer Credit Act 1974,” adds Trend. “You may also have similar cover if you paid by Visa debit card. Check the arrangements with your bank.”

The Section 75 cover will only refund the money you paid for the original fare - it will not help you get home if you are stranded abroad. You will have to pay for a new flight. It is also worth noting that an estimated 60 per cent of travel insurance policies do not offer protection against airline failures (those that do often charge extra for it).

“Passengers who have travelled will need to make their own arrangements to return home. They should contact their travel insurer or travel agent for assistance,” said the Civil Aviation Authority (CAA).

Christopher Crescent, from Dorset, was booked to fly back to London from New York on Sunday with Primera. He only saw news of what happened on Twitter. “As it stands I haven’t heard directly from Primera,” he said. “Lucky I checked Twitter.”

He contacted a number of British airlines, including British Airways and Virgin Atlantic to enquire about repatriation fares but had no response.

“I’ll likely book the cheapest option back to London. As it stands it’s Norwegian. Alternatively there’s Air India, the cheapest ‘non-budget’. But they have rumours around them in terms of their current financial state. Feels a bit like a lottery these days.”

He said he will pursue Primera for compensation but “with no real expectation”.

Charles Fenwick Elliott was booked to fly from New York to London on Thursday night for the weekend and only found out his flight would be cancelled after seeing on the news that Primera had ceased operations. He said he had checked alternative flights for the weekend but found that prices "had spiked aggressively" so cancelled the trip. 

Will I get refund on unused tickets?

The same is true for those due to travel over the coming months. Tour operators bonded by Atol will provide alternative arrangements or full refunds, but those booked directly with the airline will not be offered new flights nor will they get their money back.

Those currently claiming compensation from Primera for cancellations or delays are likely to face an uphill struggle. Even before its failure, numerous passengers had complained about the airline’s slow and unresponsive customer service.

Why did Primera collapse?

The low-cost carrier was little known in the UK - mainly running leisure services for Scandinavian tour operators - until it sought to go head to head with the likes of Norwegian and WOW by selling low-cost fares across the Atlantic. It launched an ambitious schedule of services to Washington, Toronto and New York from London and Birmingham, as well as other European cities.

Primera’s bold move was initially met with optimism, and Stansted and Birmingham welcomed the arrival of cheap transatlantic flights. It was thought the carrier might establish themselves in an increasingly competitive market.

The airline, however, suffered a torrid few months. It was forced to cancel its inaugural flight to Toronto, while aircraft delivery delays from Airbus and poor sales saw it drop several more routes.

In a statement, Primera said that “several unforseen misfortunate events severely affected [its] financial standing”, including the loss of one aircraft to “severe corrosion problems” and the €20m cost of leasing aircraft to cover the delivery delay of its Airbus A321neos.

“Weighting [sic] the potential losses due to future delivery delays, and the added exposure to our partners and lessors, and bearing in mind the difficult environment that airlines are facing now due to low prices and high fuel costs, we have decided to cease operations now, where it will have a smaller effect on our clients, due to the timing of the year, rather than increasing the exposure,” the airline said.

Was the writing on the wall?

Complaints about Primera’s customer service and its predisposition to cancelling flights at the last minute had led to the creation of a number of vitriolic Twitter accounts dedicated to documenting the airline’s struggles.

In August, dozens of Telegraph Travel readers came forward with tales of woe about Primera. The spate of correspondence followed a story about a British family who spent ￡3,000 on a dream holiday to Canada only to arrive at the airport to find their Primera flights had been cancelled months earlier.

“This airline needs to be investigated. They are thieves,” said one reader, Jim Quealy. “I myself was recently abandoned by Primera Air. My flight from Paris to Boston was cancelled seven hours prior to departure via text.”

Mr Quealy said he was given the option to book a flight with another airline to get home, which he did at a cost of $1,400 (￡1,090), and be reimbursed later.

“Now Primera will not communicate with me whatsoever regarding payment,” he said at the time. “You cannot reach them by phone, it rings and rings and rings. Email responses from them are either automated, or contain very terse responses from rude, incompetent staff. I am out $1,400 and have no idea how to get it back.”

Another passenger, Jack Webb, emailed to say he, too, had had a flight cancelled but was not informed.

He booked two one-way flights directly with the airline, one to Birmingham and one to Toronto.

“When the flights were cancelled I received no notification from the airline at all - for either flight (they had my correct email as they had emailed my confirmation to me),” he said. “I found out about the cancellation when I typed in Primera Air on Google.”

In the wake of Air Berlin's collapse last year, aviation analyst John Grant told Telegraph Travel there were too many airlines in Europe: “The competitive environment has become increasingly challenging for many airlines, with many established legacy airlines launching low-cost long-haul services and the continual growth in services from airlines such as easyJet, Ryanair and Norwegian. This has resulted in many 'mid-market' carriers with relatively high cost bases being continually squeezed to a point of failure.

“There are perhaps too many airlines in Europe today relative to the size of the market, with too many struggling to keep market share. In the United States, five major airlines provide some 80 per cent plus of scheduled capacity and that may be where the European market will head over time.” 

What more can be done to protect passengers?

For many years Telegraph Travel has been campaigning for passengers with scheduled airlines to be better protected, a crusade we relaunched this year as part of our Safer, Fairer, Better campaign. The failure of Primera is the latest of many which have left passengers stranded and out of pocket - Monarch’s demise this time last year was another. In the wake of Monarch the government finally announced a review of the problem which is still underway.

However, because Primera was based in Denmark, not in Britain, even if new rules had been brought into play, they would probably not have covered British passengers. It's yet another example of the complications and risks faced by independent travellers.