Loss-making Norwegian airline Flyr said on Tuesday 31 January it would file for bankruptcy after failing to raise the cash it needed for its operations.
"There is no longer a realistic opportunity to achieve a solution for the short-term liquidity situation," the company said in a statement, adding the board's decision was unanimous.
"All departures and ticket sales have as a consequence been cancelled."
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More than 400 employees will lose their jobs as a result of the bankruptcy, Flyr founder and board chair Erik Braathen told Norwegian daily Dagbladet.
Flyr, which launched operations in mid-2021 to serve domestic destinations in Norway as well as in Europe, said on Monday weak financial markets and uncertainty over demand for air travel had prevented it from raising more cash.
In November, Flyr said securing more funds was vital to survive the winter season and prepare for the spring and summer of 2023, but it was only able to raise about half the required cash at the time.
The carrier has operated a leased fleet of 12 Boeing 737 aircraft, including six 737 MAX planes on contract from Air Lease Corp.
The company said on Monday 30 January it had tried and failed in recent days to secure 330 million Norwegian crowns ($33 million) of funding, triggering a 78% drop in its share price.
Further trade in the stock will be suspended, Flyr said on Tuesday 31 January.
The company, whose rivals include Norwegian Air and Scandinavian carrier SAS, said on 4 October it would make heavy spending cuts to preserve cash during the winter, including furloughs, and put non-profitable routes on hold.
Flyr is the latest Nordic carrier to hit financial difficulties in recent years as the pandemic, soaring energy costs and falling consumer confidence dented demand.
SAS is itself undergoing a reorganisation under US Chapter 11 bankruptcy protection proceedings, while Norwegian Air in 2021 underwent restructuring supervised by an Irish court, emerging as a slimmed-down regional airline.
Norwegian Airline Flyr Says It Faces Liquidity Crunch, Shares Fall 78%
The above news followed news that loss-making Norwegian airline Flyr said on Monday 30 January 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% in early trade on Monday 30 January to an all-time low of 0.0015 Norwegian crowns.
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 330 million Norwegian crowns ($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 4 October it would make heavy spending cuts to preserve cash during the winter, including furloughs, and put non-profitable routes on hold.
Read More: Airline Flyr To Halve Winter Spending And Seek More Cash
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