European airline Germania canceled all its flights after it went bust. The Berlin-based airline is Germany's third carrier to collapse within a year and a half. 

The privately-owned airline grounded its fleet of 37 aircraft within hours of filing for insolvency late Monday. 

Failure to meet a short-term cash squeeze has taken a heavy toll on the firm, which German Economy Minister Peter Altmaier blamed on the market economy. 

Altmaier was quoted in the media as saying that he had no specific plans to help the airline, adding the government would watch the situation at Germania closely. 

The firm blamed rising fuel prices, as well as delays in integrating new aircraft into its fleet, high maintenance costs and a stronger dollar for its failure. 

Germany's newspaper Handelsblatt Today blamed the airline's strategy for its collapse. 

It tried to exploit the gaps its rival Air Berlin left after going bankrupt in August 2017, it said in a report published on Tuesday, adding that CEO Karsten Balke, who owned the airline, made an expansion plan that included increasing the number of planes but appeared to have miscalculated the cost in maintaining and expanding the fleet.

Germania said last month it was under financial strain, citing a "particularly challenging year" for the aviation industry.

It said last week it hadn't yet been able to pay its employees for January.

"Unfortunately, we were ultimately unable to bring our financing efforts to cover a short-term liquidity need to a positive conclusion," Balke said in a statement.

About 1,100 of its employees will lose their jobs.  

Small Planet Airlines, Germany's charter carrier, found itself in financial difficulties last year. 

Alitalia and Britain's Monarch Airlines filed for bankruptcy in 2017.

Passengers' ordeal

An unknown number of passengers were reportedly stranded in Mallorca, Turkey, and other holiday destinations. 

The Federal Association of the German Aviation Industry announced plans to help stranded passengers to return to the country, saying Condor, Tui Group's TUIfly and the Lufthansa Group airlines, etc. would offer special fares to bring Germania travelers back home. 

The German Travel Association (DRV) said tour operators would make alternative arrangements for tourists with package deals. 

The Social Democrats, junior partners in Chancellor Angela Merkel's ruling coalition, expressed concern over the ordeal passengers are facing. 

The party would push for a European system to safeguard passengers' rights in the event of bankruptcies, the party's legal spokesman Johannes Fechner was quoted in the local media as saying. 

He called on the EU Commission and European Parliament to tackle the "urgent problem."

‘Destructive competition'

In the low season, some of the European airlines may offer tickets on some of the domestic routes for less than 10 euros.  

Irish budget airline Ryanair is known as the low-cost specialist but faces fierce competition from Britain's Easyjet and Germany's Eurowings – Lufthansa Group's subsidiary. 

Germanwings, which now operates under the Eurowings brand, which once said in a low-cost flight promotional campaign that it offers flights cheaper than a taxi ride to the airport. 

German trade union Verdi said the industry is facing a “destructive competition.”

Founded in 1986, the airline offered flights to more than 60 destinations in Europe, the Middle East, and North Africa. It carried more than four million passengers a year. 

(With input from Reuters)

(Cover: A Germania Airbus A319-100 airplane takes off at the airport in Palma de Mallorca, Spain, July 28, 2018. /Reuters Photo)