German airline Germania files for bankruptcy, cancels all flights

The airline flies mainly Mediterranean, North African and Middle Eastern holiday routes for German sun-seekers on package trips. (AFP)
Updated 05 February 2019
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German airline Germania files for bankruptcy, cancels all flights

  • The airline had flown mainly Mediterranean, North African and Middle Eastern holiday routes for German sun-seekers
  • The company blamed ‘unforeseen developments’ for its cash shortage

BERLIN: Berlin-based airline Germania has filed for bankruptcy and canceled all flights with immediate effect, the company said early Tuesday.
The airline with 37 aircraft had flown mainly Mediterranean, North African and Middle Eastern holiday routes for German sun-seekers on package trips, and said it transported over four million passengers a year.
“Unfortunately, we ultimately failed to successfully complete our financing efforts to meet short-term liquidity needs,” said managing director Karsten Balke in a statement.
“We very much regret that, as a consequence, we had no choice but to file for bankruptcy.”
The company blamed “unforeseen developments” for its cash shortage such as “steep kerosene price increases over the summer of last year with a simultaneous fall of the euro against the US dollar” as well as a high number of technical services required by its fleet of aircraft.
Balke said that “we especially regret the impact that this step has on our employees,” who had done their best to ensure reliable and stable flight operations.
“I thank you all personally and with all my heart. I apologize to passengers who cannot take their Germania flight as planned,” said Balke.
The ailing company, which had reported financial woes on January, said it had filed for bankruptcy with a Berlin court late Monday and that all flights were halted overnight.
Affected passengers who booked as part of a package holiday were told to contact their tour operator for replacement flights.
“Regrettably, for passengers who purchased their ticket directly from Germania, there is no entitlement to replacement transport due to the current legal situation,” the airline said.
The company’s subsidiaries Swiss Germania Flug and Bulgarian Eagle were not affected, the statement said.
The small carrier’s bankruptcy comes after Air Berlin, formerly Germany’s second-largest airline, went bust in 2017 after shareholder Etihad Airways withdrew funding following years of losses.


Saudi Arabia aims to achieve e-payment target of 70%

Updated 22 February 2019
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Saudi Arabia aims to achieve e-payment target of 70%

  • Reform plan seeks cashless society
  • E-payments could exceed $22bn in next four years

RIYADH: Saudi Arabia wants to achieve an e-payment target of 70 percent by 2030, a banking official told Arab News on Thursday, as the country moves toward becoming a cashless society.

Talat Hafiz, from the Media and Banking Awareness Committee for Saudi Banks, said online or cashless transactions were part of the Vision 2030 reform plan.

The Financial Sector Development Program (FSDP) was one of the initiatives to support the economic growth goals of Vision 2030, he added.

“Basically it is to transfer Saudi society from being heavily cash dependent in buying goods and services to a cashless society using digital and electronic payment,” he told Arab News. “One of the FSDP’s main targets is to increase and improve the percentage of non-cash utilization, from 18 percent in 2016 to 28 percent in 2020. However, the goal will increase of course with the target to 70 percent by 2030.”

Hafiz, in an Arab News column published earlier this month, said the Saudi Arabian Monetary Authority (SAMA) had been encouraging electronic payments and settlements in order to reduce the reliance on cash.

SAMA had introduced a number of e-payment systems in the last two decades to help consumers and institutions, he wrote, such as the Saudi Arabian Riyal Interbank Express and the online bill payment portal SADAD.

Earlier this week Apple Pay was launched in the Kingdom, joining the cashless roster of payment methods available to Saudi consumers.

A cashback service operated by credit card companies, where a percentage of the amount spent is paid back to the cardholder, was introduced last year in Saudi Arabia.

An illustration of how direct debit works, courtesy of the Saudi Arabian Monetary Authority (SAMA).

“All of these efforts collectively from the SAMA side are to reach the ambitious goal of the FSDP.”

Hafiz explained that e-payments saved time and effort and allowed people to access service and goods around-the-clock. 

“This is basically why SAMA is very active and now we see SAMA and the National Payment System are responsible and leading (the country) toward a cashless society by achieving the target set by 2030.”

Last February the Amazon-owned Payfort online payments service registered a new company in Saudi Arabia.

According to the “Payfort State of Payments 2017” report, Saudi Arabia and the UAE are the fastest growing markets in the region for electronic payments.

The report estimates that Saudi Arabia conducted $8.3 billion of payment transactions in 2016, showing 27 percent year-on-year growth.

E-payments in the Kingdom are expected to double over the next four years to reach more than $22 billion, the report added.