Airlines in a Crisis

Flyr has had extra costs over the winter to prepare for possible wet leases of halve it's fleet of 12 aircrafts. They where desperate for these as they tought the news of them would bring the share price over 1 norwegian øre (0.001 Euro) so they could get some more financing according to a desperate plan. However the deal inclided paying for preparation cost up front. Money Flyr didn't have the finances for. They should relly not have gone for any wet leasing that didn't include at least a 10% payment up front and the rest of the money for each flight paid at least 1 week before it took place. After all the charter companies customers pays it all up front. Another tell tale sign of poor management is that none of the 12 planes actually have any flights scheduled for tomorrow Tuesday 31/1-2023. So we are now awaiting whether they will still be in the skies on Wednesday. A poor sign is also that on the Oslo - Trondheim route, that has a total air-passenger trafic comparable w

Instead of building a solid own brand they are going for many different quick fixes.  First it was increassing its distribution by adding third parties ticket sellers to their sales channel. The latest is an increased concentration on wet leases to charter companies.  Flyr only have 12 planes and this reduces their ability to get own upfront sales and add additional sales like car hire and accomodation.  It's all about getting the money in early. With own sales you can get the money in months sin advance. With third parties and wet leases you most likely get the payment after the fact. Meaning you will have upfront costs instead of upfront payments and Flyr is not in a financial position to take on that. While wet leases to charter companies can seem like a predictable income stream, they also comes with potential for great risks. There have been a number of charter companies getting into financial trouble in the later years. And quite a few have gone under leaving a lot of unpaid

Not only do the norwegian state demand 400 million in penalties for lack of CO2 quotas handed over for 2020. They are also demanding the handing over of an estimated 300 million worth of CO2 quotas. That is a nkr 700 million demand against only 15 million set off in the accounts of  the airline Norwegian to cover it. With such a large disputed demand against the airline, disputed because the airline itself thought this demand disappeared in the financial reconstruction of the airline 2 years ago, it is strange based on a very thin result they would commit to so much expansion. And even stranger that leasing companies would agree to such an increased risk based on the history of the airline. Not only is it a substantial financial risk but it will also tie up mangement in court and indecision at a time when they should be operationally rebuilding the airline. That is not the time to plan for a rapid 50% expansion which is bound not to only take massive resources. That many new routes cou

The CEO of Norwegian announced that they will take on an extra 30 planes closing in on 100 planes in the coming year. In addition to the planes they commited to after the restitution deal with Boeing, which one could have hoped would be used for aircraft replacements rather than even more expansion. The company is taking high risks based on only 1 summer season and 1 autumn season of positive results. 2 seasons where their Scandinavian competitors where in trouble and therefore unable to compete much. SAS with their strikes and Chaper 11 and Flyr running out of cash to such an extent that their winter program runs only 4 out of the 12 planes they are paying leases for.  That is a weak base for saying the market is so good that one should increase ones fleet with 50% in the short term. Growth costs and they'll be trying to find extra markets at a time when both SAS and Flyr could be doing the same.That do not bode well for a continued positive result for Norwegian. Question is can t

They should have made 8 trips a day and 30 days times 8 186 seat planes at average 80% fill gives 286k passengers or 36k per plane. Even just 4 planes flying 4 legs a day gives 71k passengers. 52k passengers gives about 12 legs per day for the whole fleet. What Flyr have manged is moving barely enough passengeers to justify a 2 shift working day. Remember the longest they are flying should be covered for even a return trip in 1 pilot shift with time to spare. Yield per passenger kilometer for Flyr might be up but now it is for the most parts relatively long distances like Norway to the Med. And that means they missed out on most of the domesting christmas traffic in Norway and also within Scandinavia. We also can calculate that even though yield is up per passenger km, it is only with 15-20%. And that from a state where Flyr was only taking in halve as much as they where using. We also now know that most domestic flights in the entire norwegian domestic markets where sold out the 2 wee