Not one but two European airline startups that launched during the Covid-19 pandemic are facing financial collapse, both announced within the span of a weekend.
On Saturday, regional United Kingdom airline Flybe announced that it “has now ceased trading and all flights from and to the UK operated by Flybe have been cancelled and will not be rescheduled.” Once the largest independent regional airline in Europe, operating more than half of UK domestic flights outside London, had previously collapsed in 2020.
The company was rescued the next year by Thyme Opco, a firm linked to US hedge fund Cyrus Capital, and resumed flights last spring. It is in bankruptcy only eight months later.
“Please note that Flybe is unfortunately not able to arrange alternative flights for passengers,” the airline’s website says. The Civil Aviation Authority is advising consumers booked on Flybe flights on how to recoup their money.
On Monday, Norwegian startup Flyr announced that its inability to raise the cash it needs had led to a “critical short-term liquidity situation.” The media release said the airline was exploring “whether there are feasible alternatives to secure continued operations” but warned that there was “no guarantee that a solution that would create a meaningful shareholder value for the current shareholders will be found.”
The airline launched its first domestic flights in June 2021 and expanded with international flights two months later.
The airline’s already-battered share price fell 50% to a low of 0.0030 euros ($0.003).
While the early days of the pandemic brought air travel to a halt, the crisis also changed the landscape of aviation with the launches of a bumper crop of small, regional, low-cost airlines around the world. North America now has a quartet of new budget airlines: Breeze Airways and Avelo Airlines in the US, and Jetlines and Lynx in Canada. Another startup, Aha! Airlines, launched in October 2021 but called it quits last August.
Latin America welcomed Colombia’s Ultra Air, Ecuador’s Equair, and the Dominican Republic’s Arajet. Travelers in Asia can now fly VietTravel in Vietnam and Akasa Air in India. Lift, Green Africa, and Ibom Air are new airlines in Africa.
Two pandemic-launched airlines — Iceland’s Play Airlines and Norway’s Norse Atlantic Airways — offer low-cost flights between Europe and the United States.
Notably, the bottom is not falling out on low-cost regional carriers across the board, particularly those that are well established. Ireland-based Ryanair, Europe’s largest budget airline, on Monday posted a record $229-million profit for the last three months of 2022 and crowed about robust demand for spring and summer 2023.