The Swedish airline Braathens Regional Airlines is applying for financial reorganization, a process similar to the US Chapter 11 procedure, for seven of the thirteen companies in the group. Customers will not be affected by the process, all flights will lift according to plan, and operations will continue as usual.
The airline industry is characterized by high fixed costs and small margins. The company must now act to ensure long-term financial stability. The goal of the legal process is, in addition to several improvement measures, to restructure debts and renegotiate agreements in order to secure jobs, preserve the important aviation infrastructure and availability in Sweden, and to create long-term sustainable conditions for BRA.
Braathens Regional Airlines (BRA) is a Swedish airline with a long history that began in 1946. Every year, around one million passengers travel with BRA, which is currently Sweden's largest domestic flight in terms of number of routes. The company has approximately 500 employees. Over the past year, BRA has started a new business area, charter flights for tour operators, which has doubled the operations in a short period of time.
The pandemic was a major test for the airline industry, and during the current recession, the recovery in domestic travel has slowed down, while costs have increased, ranging from airport charges to fuel prices and interest rates. The company is heavily negatively affected by currency effects due to the weak Swedish krona. During the summer, the company has also been affected by delays in aircraft deliveries due to global capacity shortages of aircrafts and spare parts, which has resulted in large one-off costs.
We are proud to have flown passengers and have helped to keep all of Sweden connected for over 25 years. There will always be a need to fly, and customers want companies that drive sustainability in the industry. At the moment, a series of unfortunate factors have put us in a difficult situation. The decision to apply for reorganization is necessary in order to take responsibility for jobs, the aviation infrastructure in Sweden and the business in the long term. We will continue our ambition to transition the aviation industry to fossil-free as quickly as possible, says Per G. Braathen, Chairman of the Board and owner of BRA.
The company underwent a financial reorganization during the pandemic when travel came to an abrupt halt in Sweden. At that time, the company froze its operations and parked all aircraft for 13 months, until travel started again.
Today's situation is completely different from the one that prevailed during the pandemic when travel, more or less, was non-existent. This time, we will continue our business as usual and customers will not be affected. At the same time, we need to act now and through a number of measures, we will create long-term conditions for operating and developing a sustainable, modern airline. I have a confident view regarding the future and the opportunities for BRA, says Ulrika Matsgård, CEO of BRA.
The owners are willing to inject new capital in connection with a successful reorganization process and are considering broadening ownership.
Year after year, BRA has been ranked highest in external surveys regarding customer service. BRA is also one of the most punctual airlines in the world. The company is a pioneer in sustainability work, for example, BRA was the first airline in the world to be environmentally certified and to offer all passengers biofuel tickets.
About BRA
Braathens Regional Airlines (BRA) is a Swedish airline, with Stockholm Bromma Airport as its main hub. The goal of reaching net-zero emissions by 2030 makes Braathens Regional Airlines a pioneer in fossil-free aviation.
- In 2009, BRA became the first passenger airline to be environmentally certified
- Since 2018, BRA offers all travelers the opportunity to book flight tickets with 100% bio jet fuel
- In 2022, BRA carried out the world's first flight with 100% biofuel in both tanks
- BRA is currently Sweden's largest domestic airline in terms of number of routes
- In 2023, BRA established a new business area with charter flights on behalf of travel agencies
- BRA is owned by the Swedish investment company Braganza and AMF.
What is a financial reorganization? A financial reorganization is a tool for companies that have temporary financial difficulties but have good prospects of surviving in the long term. The district court approves financial reorganization if the viability of the company can be secured through the process. During a reorganization, it is common for debts to be written down, contracts to be renegotiated and new capital to be injected. Business will continue as usual, and customers will not be affected. Already when applying for financial reorganization, the company receives protection against bankruptcy and the termination of contracts. An application for financial reorganization is normally made for three months, with the possibility of extension for periods of three months at a time. The company's ambition is for the reorganization to be completed during the first quarter of 2024.
The companies that have applied for financial reorganization are: Braathens Regional Airlines (BRA) AB, Braathens Crew AB, Braathens International Airways AB, Braathens Regional Airways AB, BRA Sverige AB, Braathens Support AB and Braathens People AB.