On Thursday, Norwegian-based low-cost carrier Flyr announced it is looking to raise NOK 530 million ($52 million) via a private placement of shares. On the same day, the airline announced a third-quarter operating loss of NOK 231.7 million ($22.6 million), bringing year-to-date operating losses to NOK 723.5 million ($70.7 million).
The numbers are even bleaker in terms of net losses, which for Q3 were NOK 452.9 million ($44.28 million) and for the nine months to September 30th was NOK 1.1 billion ($107.5 million). In the full-year 2021, Flyr posted an operating loss of NOK 420 million ($41.1 million) and a net loss of NOK 437 million ($42.7 million).
The right aircraft and routes, so what's happened?
Flyr's inaugural service was in June 2021, and it has grown to operate 28 routes to 26 destinations in 11 countries. During Q3 2022, Flyr carried a total of 667,000 passengers with a load factor of 80%, up from 69% in Q2. It operated 4,770 flights using an average of 10 aircraft, although its fleet had grown to 12 by the end of September. From that, it generated operating revenue of NOK 610 million ($59.6 million), bringing year-to-date revenue to NOK 1.03 billion (101 million).
Based on fleet data from ch-aviation.com, Flyr's current fleet comprises six Boeing 737-800s and six 737 MAX 8s, with two more MAX 8 aircraft on order. The data shows that all twelve aircraft are leased, with the average age of the 737-800s at 10.5 years and the Max 8s at 1.7 years. The MAXs are fitted with CFM LEAP 1B engines, while the 737-800s have a mix of CFM56-7B variants.
While the Q3 results are listed in Thursday's announcement, the losses do not figure in the commentary from Flyr CEO Tonje Wikstrøm Frislid. She says that strong demand on European routes has made Flyr a preferred airline for many leisure travelers in Norway. "Despite challenging market conditions and other external factors, we have been very well received in the market," adding:
"Overwhelmingly positive customer feedback demonstrates that Flyr represents something new to the airline industry, offering a simple and user-friendly digital booking process and taking good care of the customer through the entire journey."
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Cutting staff and flights by 50%
Last month Flyr announced it was taking "forceful action to reduce cash burn" during winter, aiming to cut costs by 50%. The airline estimated that making cuts that size would save around NOK 400 million ($39.1 million), close to its net loss in Q3. Flyr intends to furlough half its staff and cut operations to just five or six aircraft during winter, reducing domestic routes in Norway "to a minimum."
From November to March, it will operate routes to Alicante, Malaga, Las Palmas, Barcelona, Rome, Paris, Nice, Berlin and Brussels. Domestic routes will be from Oslo to Bergen and Trondheim, as well as some un-named Christmas routes in December. In a rather bland apology to customers, Wikstrøm Frislid said, "All affected guests will be contacted directly to be rebooked to another flight or to be refunded."
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Illustrating the financial difficulty Flyr is in, the placement shares will be issued at NOK 0.01. According to euronext.com, Flyr shares opened at NOK 0.14 on November 3rd and closed on November 4th at NOK 0.08. Flyer also put out a Notice of Extraordinary Meeting to be held on November 10th to approve the issuing of the shares.
Have you flown with Flyr, and do you think they will get through winter?
Source: euronext.com