Norwegian carrier Flyr could be the next small carrier to run into trouble after the recent collapse of Flybe.
It has announced it has not raised enough capital to proceed with a wet lease deal agreed in December 2022 for six aircraft, meaning there is "no guarantee" it could continue to fly.
The lease agreement followed a November financing plan the carrier said was not working as planned, in part as it required getting more cash by the end of the first quarter of 2023 to cover costs related to the European Union's emissions trading scheme.
"The share price of the company has traded considerably below the subscription price of the November financing plan, which meant that succeeding with the November financing plan became increasingly unlikely. As such, the company had to consider alternatives to secure its financial needs," Flyr said.
"The commercial terms of a wet lease agreement for six aircraft with a European airline was agreed in principle on 23rd December 2022, but due to the uncertainty of the November financing plan, signing of the agreement was made conditional on the company securing further financing," Flyr said.
But the December deal has not worked out, Flyr said, putting the failure down in part to "the global shortfall in available aircraft".
"The managers have not yet been able to raise the sufficient market underwriting" for the lease deal, Flyr said, adding that "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, in spite of the company’s wet lease opportunities and improving tickets sales".
"The company and the board will continue its efforts to explore solutions for the company, including exploring whether there are feasible alternatives to secure continued operations, and will revert with further information as and when appropriate. There is, however, no guarantee that a solution that would create a meaningful shareholder value for the current shareholders will be found," Flyr warned.