Norway’s Flyr to raise $29mn more funding after 3Q21 loss

Flyr (FS, Oslo Gardermoen) earned “significantly lower than expected” revenue during the third quarter and now intends to conduct an equity issue to raise more cash, it revealed in a trading update on Monday, November 8.

The start-up low-cost carrier conducted its inaugural commercial flight at the end of June, and it currently operates four leased B737-800s, according to the ch-aviation fleets advanced module. Six of its 11 routes are domestic within Norway, while most of the rest are to Mediterranean destinations, the ch-aviation capacities module shows.

Last month, it signed a letter of intent for six new B737-8s for delivery starting in early 2022 with an option for four more in 2023.

Flyr saw revenues of NOK39.6 million kroner (USD4.65 million) in the July-to-September quarter, with a loss before interest, tax, depreciation, and amortisation (EBITDA) of NOK142.8 million (USD16.78 million), the company said. It operated “an average of 15-16 flights per day in the quarter.”

“While revenues in August and September were significantly lower than expected due to the general delay in demand growth that was caused by the Covid-19 Delta variant, there has been a substantial pick-up in travel activity since the reopening of society,” Flyr explained.

It added that the number of daily flights is now in the 20-25 range, and “load factor development has been positive since the end of the third quarter.” Total cash burn from start-up until the end of the third quarter was NOK248 million (USD29.15 million), NOK94 million (USD11.05 million) of which was spent before the first flight.

Flyr has now secured commitments from new and existing investors for a share sale amounting to NOK250 million (USD29.39 million), it said in a separate regulatory filing, with the chairman of the board Erik Braathen among the underwriters.

“The net proceeds from the rights issue will be used to re-establish the company’s financial buffer for the period until the company becomes cash-flow positive and for general corporate purposes,” the company said, adding that the proposed issue is subject to approval by shareholders at an extraordinary general meeting expected in December 2021 or January 2022.

“With a total cash position on September 30 of NOK363 million [USD42.67 million] and an equity ratio of 42.5%, Flyr is comfortably funded to continue its planned expansion of flight operations. Through the equity issue, Flyr will strengthen its financial buffers to ensure an optimal traffic expansion in a reopening market,” it pledged.

However, the news prompted a fall in its share price from NOK3.85 (USD0.45) at the previous close to NOK3.05 (USD0.36) at the close of Monday, well below the NOK5 (USD0.59) that investors paid in the company’s initial public offering in February. Flyr will publish its complete financial report for the third quarter on November 11.