The latest cull among Europe’s smaller airlines was in full force this fall, with Latvian LCC Primera Airlines and both the German and Polish units of Lithuanian leisure carrier Small Planet Group failing or scrambling to restructure.

Relative to 2017’s failures of UK leisure carrier Monarch and Germany’s airberlin, the latest airline names to topple are small and less well known internationally. But they demonstrate what rough-and-tumbles the low-cost markets have become, within Europe and over the Atlantic.

In September, Small Planet Group’s German airline declared insolvency, although it said it had permission to continue German and Dutch flight operations while it restructures.

Primera’s bankruptcy followed Oct. 1. The airline was planning a rapid expansion to take its network well beyond its European leisure market roots and into the transatlantic market. Just this past summer, it launched service between London Stansted and Washington Dulles. Primera finger-pointed to delayed deliveries of the new aircraft it needed to support its expansion, wrecking its growth plan. 

Within two weeks of Primera’s demise, a second Small Planet Group airline, this time its Polish carrier, filed an “accelerated arrangement,” which the company describes as a process to restructure, reduce aircraft and find financial resources so it can continue to operate. 

Among common threads across these failures are airlines that were formed relatively recently, attempted to grow fast and then attempted to switch their business models from leisure/charter to network/scheduled or from purely short- and medium- to long-haul. 

Small Planet Airlines GmbH—the group’s German airline—was formed in 2015 and secured its air operator’s certificate in April 2016. The airline initially was focused on holiday destinations in the Mediterranean, Egypt and the Canary Islands for German tour operators. When airberlin went under, management decided to make a push to expand rapidly in Germany, a strategy that Small Planet Group CEO Vytautas Kaikaris later admitted “didn’t go according to plan.”

Like Primera, Small Planet said the plan failed in part because of late aircraft deliveries.

But the truth is that Primera and Small Planet’s ambitious growth plans put them head-to-head with established LCCs in the market—some of them, like easyJet, Ryanair and Wizz Air, that are much larger and have far greater network and frequency clout. Those LCC giants are already duking it out with Europe’s legacy carriers and in many markets, they’re the ones that are winning. Small Planet Poland’s biggest problem is Ryanair, which has created Ryanair Sun specifically for the Polish market. 

Primera’s growth plan was even more audacious because it targeted the transatlantic LCC market, pitting itself against Norwegian and WOW air. The legacy carriers, meanwhile, are fighting this new competition with their own long-haul LCC offerings. IAG’s Level, Air France’s Joon and Lufthansa’s Eurowings are all intent on maintaining the transatlantic passenger. The US majors are eyeing extending their “basic economy” fare products to the transatlantic market precisely to stay competitive against the long-haul LCCs.

Alitalia omen

But perhaps the most interesting question is what this increasingly cut-throat market means for the future of Alitalia. This time round, Alitalia has been in bankruptcy since 2017 and time is running out to find new owners and investors.

Alitalia’s unions publicly lauded “progress” in mid-October of a plan that appeared to patch together an owner-combo of the Italian government, a state bank and some Italian and foreign investors that might include a railroad company. 

It’s difficult to see how these latest “rescuers” would bring about anything different—let alone better—than the heavy investment plans that various owners have previously made in the Italian flag carrier. All failed. In 2014, Etihad Airways took a 49% stake in Alitalia and plowed millions into the company. But the story ended the same as it always has; the airline’s labor groups flat-out rejected job cuts and embarked on costly strikes.

Lest anyone think that the pattern will change, a new-formed union that joins together the carrier’s pilot and cabin crew unions laid out an audacious business plan for its new owners to pursue: Invest more than $2 billion, attack the transatlantic market with new aircraft and “make the most of the various opportunities the market offers not only to eliminate job cuts, but to increase employment.”

Such starry-eyed ambitions are almost laughable set against the stark realities of the marketplace. 

Without serious restructuring, including job cuts, Alitalia cannot possibly survive, let alone compete with old and new LCCs, the Gulf carriers and the restructured European and North American airlines. Its new owners will merely be investing in yet another gangplank toward yet another bankruptcy.