UPDATE 1-Norway's Flyr airline rises 28% after IPO

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OSLO, March 1 (Reuters) - The shares of Norway's Flyr FLYR-ME.OL airline rose 28% in its debut trade on Oslo's Euronext Growth stock market on Monday as the start-up carrier prepares to compete with established players Norwegian Air and SAS.

Flyr, which means “flying” in Norwegian, is betting on a recovery in demand from the COVID-19 pandemic. It plans to launch its maiden flight by mid-2021, serving domestic routes in Norway and also offering trips to major European destinations.

Founded by airline industry veterans, Flyr raised 600 million Norwegian crowns ($70 million) in its initial public offering (IPO), and aims to buy or lease a fleet of eight jets, with a planned increase to 28 aircraft in the next 3-4 years.

“This will enable us to pursue opportunities in a changing market and a recovering airline industry,” Chief Executive Tonje Wikstroem Frislid said following the IPO.

“Due to the availability of aircraft and crew, a rapid and demand-driven scale-up is possible for Flyr,” she added.

The fledgling company traded at 6.40 Norwegian crowns per share at 0845 GMT, up from 5 crowns in the initial public offering, giving Flyr a market value of 960 million crowns following strong demand in the IPO.

The global airlines industry has suffered heavy losses as the coronavirus pandemic discouraged flying, and rival Norwegian Air is currently restructuring to avert collapse, seeking to scale down its fleet to around 50 aircraft from 140.

Brokers Arctic Securities, Carnegie and Sparebank 1 Markets managed Flyr’s IPO. ($1 = 8.6351 Norwegian crowns) (Reporting by Terje Solsvik, editing by Gwladys Fouche and Louise Heavens)