OSLO, Jan 31 (Reuters) – Loss-making Norwegian airline Flyr (FLYR.OL) said on Tuesday it would file for bankruptcy after failing to raise the cash it needed for its operations.
“There is no longer a realistic opportunity to achieve a solution for the short-term liquidity situation,” the company said in a statement, adding the board’s decision was unanimous.
“All departures and ticket sales have as a consequence been cancelled.”
More than 400 employees will lose their jobs as a result of the bankruptcy, Flyr founder and board Chair Erik Braathen told Norwegian daily Dagbladet.
Flyr, which launched operations in mid-2021 to serve domestic destinations in Norway as well as in Europe, said on Monday weak financial markets and uncertainty over demand for air travel had prevented it from raising more cash.
In November, Flyr said securing more funds was vital to survive the winter season and prepare for the spring and summer of 2023, but it was only able to raise about half the required cash at the time.
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The company said on Monday it had tried and failed in recent days to secure 330 million Norwegian crowns ($33 million) of funding, triggering a 78% drop in its share price.
Further trade in the stock will be suspended, Flyr said on Tuesday.
The company, whose rivals include Norwegian Air (NAS.OL) and Scandinavian carrier SAS (SAS.ST), said on Oct. 4 it would make heavy spending cuts to preserve cash during the winter, including furloughs, and put non-profitable routes on hold.
Flyr is the latest Nordic carrier to hit financial difficulties in recent years as the pandemic, soaring energy costs and falling consumer confidence dented demand.
SAS is itself undergoing a reorganisation under U.S. Chapter 11 bankruptcy protection proceedings, while Norwegian Air in 2021 underwent restructuring supervised by an Irish court, emerging as a slimmed-down regional airline.
($1 = 9.9939 Norwegian crowns)
Reporting by Terje Solsvik
Editing by Bernadette Baum, Mark Potter and Mark Heinrich
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