By Ezra Gollan
Opinion: FLYR’s Bankruptcy Should Send A Signal To Low-Cost Startups That It Is Finally Time to Stop
Norwegian ultra-low-cost startup carrier FLYR announced it had plans to file for bankruptcy on Tuesday following failed efforts to raise the cash needed to continue operations.
The carrier had been operating for roughly a year and a half, offering services out of a base in Oslo to both business and leisure destinations throughout Europe.
Unfortunately though, as has been seen around the globe with low-cost carrier startups, money is tight and more often than not, they scuffle until they can scuffle no longer. The company released a statement saying that “The board’s decision is unanimous and is due to the fact that there is no longer a realistic opportunity to achieve a solution for the short-term liquidity situation.” The airline had been searching in recent months for solutions with announcements in early November that there was potentially light at the end of the tunnel.
FLYR’s higher up circle seemed to carry a common theme that is also very present at new point-to-point long haul startup Norse: many had some experience working at Norwegian Air International during its disastrous long haul days. Nothing sets up a startup for financial success quite like hiring a myriad of accountants and executives from an airline that made itself into what was one of many victims of the low-cost startup market in Europe.
FLYR also released reports in December saying load factor numbers looked promising at 77% for the low season though it hoped to increase those numbers going forward. Load factors for the 2022 year however sat at a measly 74%, far too low for any airline, especially a low cost one operating on a finite money line to sustain. It is one thing for a subsidiary of a large European carrier to struggle financially. It is another for an airline backed by little more than some less than confident investors.
The reasons for low optimism didn’t stop at load factors either. A new CEO in Brede Huser was appointed at the end of November as Tonje Wikstrøm Frislid, FLYR’s then CEO, made the decision to step down. You cannot blame Frislid for having little interest in being at the helm of the airline’s downfall though from a morale standpoint, it is hard for things to look worse. Huser, a former Norwegian Air Shuttle executive, could likely do little to save the carrier from what is now bankruptcy.
FLYR operated a fleet of 12 737-800 and 737 MAX 8 aircraft during its existence employing 450 individuals at bases in Oslo and at airports around Europe. It is obviously a sad day for the airlines employees who will now be in search of new work in the industry but this is another casualty in the market that should signal the end of the low-cost startup.
Ezra Gollan is a student, photographer and aviation enthusiast based in New York, New York. He has spent over half a decade around New York City’s airports as a photographer.
