Flyr Reduces Route Network To Minimize Cash Burn
Flyr is reducing its winter schedule ahead of what it expects will be a challenging season, admitting that “forceful action” is needed to reduce cash burn.
The carrier, which began operations in 2021, plans to cut a slew of European destinations from its network and reduce domestic routes in Norway to “a minimum.” The airline expects to operate about five or six aircraft this winter, compared to the 12 that are currently in service.
In a statement, Flyr said it is targeting a temporary cost reduction of up to 50%, with an estimated reduction in cash burn through the winter of approximately NOK400 million ($38 million). Alongside the suspension of non-profitable routes, the carrier will use furloughs either on a full-time or part-time basis and is seeking to raise further investment.
“We are entering a demanding winter season where discretionary consumer spending is expected to decrease significantly following the recent interest rate hikes, high general cost inflation and record high energy prices,” CEO Tonje Wikstrøm Frislid said.
“This is hard-hitting to the airline industry and Flyr as a company and will result in reduced demand for air travel. This, together with the lasting high jet-fuel prices, leaves us with no other option than to adjust our route offering for the coming winter season.”
Flyr plans to continue service to Alicante, Malaga, Las Palmas, Barcelona, Rome, Paris, Nice, Berlin and Brussels during winter. It will also offer flights from Oslo to Bergen and Trondheim, as well as "Christmas routes" between several cities in Norway in December.
At the present time, Flyr offers 28 routes across its network, serving 24 destinations, data provided by OAG Schedules Analyser shows. Flights to the likes of Athens, Faro, Pisa and Porto are among the destinations being cut this winter.
“We have experienced satisfactory demand on our routes to European holiday destinations and will maintain a selection of popular destinations for the coming winter,” Wikstrøm Frislid said.
She added that it has taken “longer than expected” to build loyalty among business travelers on domestic routes in Norway—and said that it has “not been to our advantage” that several competitors received state aid during the pandemic.
Flyr said it would “continuously evaluate the demand for air travel” over the coming months and respond accordingly by adding back routes if demand picks up faster than anticipated.
Additionally, the LCC has engaged financial advisory firms Arctic Securities AS, Carnegie AS and Sparebank 1 Markets to conduct meetings with both existing and potential new investors.
Flyr launched passenger flights in June 2021 and currently has six Boeing 737-8s and six 737-800s in service.