Thousands of travellers hit as Austria's second largest airline ceases trading

Prior to today Niki had a fleet of 30 aircraft and served around 30 cities, making it Austria’s second largest carrier
Prior to today Niki had a fleet of 30 aircraft and served around 30 cities, making it Austria’s second largest carrier Credit: 2017 Getty Images/Adam Berry

Thousands of European passengers face being stranded overseas after Niki, Austria’s second largest airline, ceased operations. The carrier, a subsidiary of Air Berlin, which went bankrupt earlier this year, had been in talks with Lufthansa over a possible takeover.

That deal fell through on Wednesday following resistance from the European Commission, and Niki grounded all flights on Thursday morning. 

Austria’s transport minister warned that as many as 10,000 passengers could be affected, although several airlines have offered to fly stranded travellers home for a small fee.

"Passengers who have booked their flight with a tour operator are kindly asked to contact their tour operator," reads a statement on Niki’s website. "Several airlines are currently looking into solutions for bringing back passengers on a standby basis, for a small fee, back to Germany, Austria and Switzerland."

While Air Berlin ceased operations in October, Niki soldiered on, flying from its home base in Vienna, and other airports in the region, to leisure destinations in Spain, Portugal and North Africa.

While Air Berlin ceased operations in October, Niki soldiered on
While Air Berlin ceased operations in October, Niki soldiered on Credit: GETTY

Prior to today it had a fleet of 30 aircraft and served around 30 cities, making it Austria’s second largest carrier. It was founded in 2003 by Niki Lauda, the former F1 driver, and merged with Air Berlin in 2011, sharing booking systems and planes. Its aircraft livery became identical, save for the Niki logo on the side.

Niki, along with its parent company, struggled in recent years. Routes to Copenhagen, Moscow and Frankfurt were scrapped in 2014 due to low demand, its only medium-haul route - to Abu Dhabi - was ditched in 2016, and services to Linz, Milan, Zurich fell by the wayside in 2017.

A deal with Lufthansa would have seen Niki absorbed into its low-cost subsidiary Eurowings Europe, and the Niki brand scrapped, but it fell through when the European Commission withdrew its backing due to competition concerns. The bankrupt airline is now desperately searching for a new buyer. 

Why are so many airlines failing?

Given the collapse of Air Berlin, Niki’s demise is hardly surprising. Nevertheless, it has been a tough few years for the aviation industry. Eleven carriers have been lost in 2017, the most notable being Monarch, on top of the 11 that failed in 2016 and the 14 that ceased trading in 2015.

Competition between airlines has reached fever pitch – and more failures could be on the cards, experts predict.

John Grant, an aviation analyst, told the Telegraph: "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."

According to Telegraph consumer expert Nick Trend, all this could spell the end of the ultra-low fares we've become accustomed to.

He said: "We are certainly entering a new phase in the story of no-frills flying, one where fewer airlines are likely to dominate the market and fares may rise."

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