Sweden’s BRA Seeks Creditor Protection Amid Industry Challenges

BRA – Braathens Regional Airlines, based in Stockholm Bromma, has initiated the process of corporate restructuring in Sweden, akin to the Chapter 11 procedure in the United States, for seven out of thirteen companies within the group. The airline assures passengers that air operations will continue as planned during this period, emphasizing that they will not be affected by the restructuring process.

The decision to apply for reorganization comes as BRA faces challenges stemming from the weak Swedish krona, exchange rate fluctuations, and global capacity shortages of aircraft and spare parts, leading to substantial one-off costs. BRA’s chairman and owner, Per G Braathen, stated that the reorganization is necessary to assume responsibility for jobs, sustain aviation infrastructure in Sweden, and ensure the long-term viability of the business.

Currently operating a fleet of fourteen ATR72-600s leased through AOC holder BRA – Braathens Regional Airways, BRA is evaluating options to broaden its ownership. The airline’s subsidiary, Braathens International Airways, launched earlier this year, operates four A319-100s and wet-leases an A320-200 from GetJet Airlines. The subsidiary, focusing on charter flights for tour operators, has rapidly expanded its operations.

Highlighting the challenges faced by the airline industry, BRA acknowledged the combination of high fixed costs and narrow profit margins. The restructuring process aims to address these financial challenges, with a focus on debt restructuring and agreement renegotiations. BRA, established in 1946, experienced a prior restructuring during the early days of the pandemic, filing for bankruptcy protection in April 2020. After creditors accepted a restructuring plan and debt reductions, the airline successfully relaunched in October 2020.

The current situation is characterized as distinct from the pandemic period, with BRA navigating through operational difficulties unique to the industry. The owners express their willingness to inject new capital as part of a successful reorganization process, with considerations for broadening ownership. With approximately 500 employees, BRA’s move toward restructuring reflects the airline’s commitment to securing long-term financial stability in a challenging aviation landscape.