Norwegian airline Flyr's unsuccessful attempts to raise investment funds will see the budget carrier make operational cuts. This survival move is unlikely to see its summer season plans go the distance.
Loss-making Norwegian airline Flyr said on Monday it had failed to raise the cash it needs from shareholders and other potential investors, leaving it in a “critical short-term liquidity situation”.
Flyr’s share price, already weakened by the budget carrier’s financial woes, fell 78 percent in early trade to an all-time low of 0.0015 Norwegian crowns ($0.00015.)
While the board continues to explore “feasible alternatives” to secure its continued operation, the potential solutions could wipe out the remaining value of its existing shareholders, the carrier said in a statement.
Flyr in November said raising cash was vital for the company to survive the winter season and prepare for a ramp-up in spring and summer of 2023, but it was only able to raise about half the required cash at the time.
The company said it had tried in recent days to secure funding of $33.27 million but the effort failed.
“Market conditions and continued uncertainty with regards to airline travel and earnings through 2023 have deterred investors from committing capital for the required period of time,” Flyr said.
The company, whose rivals include Norwegian Air and SAS, 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.
Reporting by Terje Solsvik, Editing by Louise Heavens and Christina Fincher
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Photo credit: Norwegian budget carrier Flyr. Supplied