The 266 employees and several major European partners of PrivatAir will not be in a festive mood this holiday season. The Swiss company announced on December 5, 2018, it has filed for insolvency in Switzerland and Germany due to multiple events that have recently affected its businesses.
“It is with great sadness that PrivatAir SA, Switzerland, announces today that it has filed to commence insolvency proceeding in Switzerland. Likewise its subsidiary PrivatAir GmbH in Germany has also filed for insolvency today,” an official statement from the company on December 5, 2018, reads.
PrivatAir states it was forced to file for insolvency due to “a number of events” that had greatly impacted the companies’ future business forecast and viability.
What ties PrivatAir & Lufthansa, Swiss, KLM?
Founded in 1977 in Switzerland, PrivatAir had operated a fleet of Boeing 737s and Airbus A319s between its Swiss and German businesses, leasing these aircraft to other airlines. The company mostly provided ACMI services for Lufthansa, Swiss, and KLM – its biggest known European customers.
PrivatAir was on contract with Swiss since 2005 operating an upgraded Boeing Business Jet, the Boeing BBJ2, on the Zürich - New York Newark route. The service was operated 6 days per week with the aircraft configured with 56 lie-flat seats in a single business class cabin.
In 2005, PrivatAir was also contracted by KLM to provide a 6 days per week service on the Amsterdam-Houston route, after the Dutch airline replaced its 767-300 fleet in favor of the Boeing Business Jet.
But PrivatAir’s long-standing partner and perhaps largest customer was Lufthansa. The company used to provide the German carrier with long-haul narrow-body aircraft (since 2002). The first was a Boeing Business Jet operated on a wet lease basis on the Dusseldorf - New York route.
A year later, PrivatAir added two more 737s to Lufthansa’s fleet flying the jets on a wide range of routes. Most recently, the Swiss company operated three 737-800s on behalf of Lufthansa.
Too small for big fishes?
Things have not been going that well for PrivatAir far longer than the difficulties experienced by the company “over the past few weeks”, as it notes in its December 5 announcement.
Initially, the service provided proved to be highly successful commercially with customers requesting additional aircraft to be flown by PrivatAir on their routes.
However, the market has grown significantly since the golden days of the company’s operations, and it might be that it was just not able to keep up with the pace.
One point that draws attention to PrivatAir’s operations are the premium-cabin configurations on its aircraft. For instance, the BBJ2, flown for KLM, is an upgrade on the Boeing Business Jet, featuring more cabin space with the capacity to fly up to 50 passengers in luxury (it is essentially, a long-haul version of the 737-800).
Most recently, however, PrivatAir had only been operating two Boeing 737-700s. Both planes were placed in storage since this October, as Planespotters.net data indicates.
As for Lufthansa, over the years, it had to downgrade the aircraft from a business-only cabin to a business/economy class cabin layout until eventually severing ties with PrivatAir earlier this year.
“In summer 2018 Lufthansa decided to suspend the cooperation for operational and commercial reasons until further notice,” Thomas Jachnow, Spokesman for Lufthansa Group, told AeroTime.
Privat Air operated a minor number of flights between Scandinavia and the U.S. on behalf of SAS, but the collaboration ended in the fall of 2017, as Freja Annamatz, Head of Media Relations at SAS Sweden noted.
One man’s loss is another one’s… ?
Coming back to what PrivatAir’s insolvency means for Lufthansa, Jachnow said it would have no direct operational impact on the carrier, which is currently reviewing its next steps in light of the announcement.
Asked whether the carrier will now cancel its Pune - Frankfurt route, Jachnow indicated that Lufthansa will fly to Pune to January 31, 2019 with its own aircraft as an interim solution, something it has been doing since November 1, 2018, already.
“The length of the runway in Pune only permits approaches by short-haul aircraft, which is why Lufthansa operates the connection with an Airbus A319; a short refuelling stop in Baku is therefore necessary,” the spokesman added.
As for PrivatAir’s employees, now left without a job, the news must definitely sour the ending of 2018. The company states it directly employs 226 staff across Switzerland, Germany and Portugal. Little is known about its businesses outside Europe. PrivatAir says it uses the services of 65 crew members via an external contracting entity for its Middle East operation, a Jeddah – Riyadh shuttle.
