Upstart airline Flyr to raise more cash after Q3 loss
OSLO (Reuters) – Norwegian airline Flyr, which launched its first flight in late June, earned far less revenue than expected in the third quarter and now plans to raise more cash, the carrier said on Monday, triggering a sharp fall in its shares.
The company is one of several upstarts hoping to take a bite out of the Nordic market for air travel, which is dominated by regional airlines SAS and Norwegian Air.
Flyr’s revenues amounted to 39.6 million Norwegian crowns ($4.6 million) in the July-September period, with a loss before interest, tax, depreciation and amortisation of 142.8 million, the company said.
“While revenues in August and September were significantly lower than expected due to the general delay in the 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 said in a statement.
Flyr has secured commitments from new and existing investors for a share sale amounting to 250 million crowns, with board Chairman Erik Braathen among the underwriters, it said.
“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,” it said.
Flyr flew on average between 15 and 16 flights per day in the third quarter, which has since risen to between 20 and 25, it said.
The company’s share price fell 12.9% by 0834 GMT to 3.35 crowns on Monday, well below the 5 crowns paid by investors in the company’s initial public offering in March.
(Reporting by Terje Solsvik, editing by Gwladys Fouche)