Braathens Regional Airlines (BRA) is in financial trouble after strong headwinds from the weak Swedish krone, rising costs and interest rates.
Per G. Braathen’s airline BRA is going through a financial reconstruction. Photo: Fredrik Bjerknes / Dine PengerPublished: Published:
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The airline, where aviation veteran Per G. Braathen is the main owner, was this week granted a so-called corporate restructuring in Sweden, a scheme that allows companies in financial trouble to clear their debts and obtain protection from bankruptcy.
Seven of the group’s thirteen companies are covered by the process which was approved by the Solna District Court on Thursday. BRA emphasizes that flights and business will continue as usual while the company goes through the reconstruction.
Photo: BRA
Affected by weak crown
This is the second time in a short time that BRA has had to go through a financial clean-up. Also during the pandemic, the company underwent a reconstruction. At that time, all flights were grounded for 13 months until the travel business started up again.
– Today’s situation is completely different from the one that prevailed during the pandemic when travel was largely non-existent. This time we will continue our business as usual and the customers will not be affected, says managing director of Ulrika Matsgård in BRA in a press release.
– At the same time, we must act now and through a number of measures we will create long-term conditions for running and developing a sustainable modern airline, she says.
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In the report, BRA points to several reasons for the problems. According to the company, recovery in domestic travel has slowed down after the pandemic, while costs have risen on everything from fuel to airport taxes and interest.
In addition, BRA is affected by negative currency effects due to the weak Swedish krone. The company also points to large one-off costs as a result of delayed aircraft deliveries this summer after there has been a capacity shortage for aircraft and spare parts.
Can deposit money
– Right now, a number of unfortunate factors have put us in a difficult situation. Taking the decision we have now taken is necessary to take responsibility for the workplaces, the aviation infrastructure in Sweden and the business in the long term, says chairman and owner Per G. Braathen.
He is the main owner of BRA through his investment company Braganza. The Swedish pension fund AMF is also on the owner’s side. BRA states that the owners are willing to inject new capital into the airline in connection with the debt settlement.
The group’s annual accounts for 2022 showed a result before tax of minus SEK 107.4 million from a turnover of SEK 1.37 billion.
The group’s long-term interest-bearing debt was stated at SEK 692 million at the end of last year, while short-term interest-bearing debt was SEK 170 million.
The aim of the reconstruction is to get rid of debt and renegotiate agreements to secure jobs, states BRA. The airline has around 500 employees and flies domestically in Sweden.
2023-10-21 12:10:24
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