After altering its business plan, the embattled carrier has finally been thrown a lifeline
The government of Norway has backed a rescue plan for struggling carrier Norwegian Air Shuttle and will contribute to the airline’s funding of new capital, allowing it to pursue a path away from bankruptcy.
The move is a shift of position from the one the government took in October when it denied the company a second bailout and forced it to seek protection from creditors in Ireland and Norway.
“On behalf of everyone at Norwegian, I would like to sincerely thank the government for their support. Norwegian has been faced with a very challenging and demanding situation due to the pandemic, and the government’s support significantly increases our chances of raising new capital and getting us through the reconstruction process we are currently in,” said Jacob Schram, Norwegian CEO.
The simplified business plan focuses on a European route network and the discontinuing of long-haul operations, as well as significantly reducing debt.
The plan comprises a fleet of around 50 aircraft in operation this year, and to gradually increase to approximately 70 jets in 2022, pending demand and potential travel restrictions. The debt will be reduced to around NOK 20 billion (£1.7bn), and the company will raise four to five billion NOK (£386m) in new capital.
Schram, added: “With a new business plan, and a participation from the government, we are confident we can attract investors and get through the Examinership and reconstruction process. We have received extensive support from political parties, customers, colleagues, shareholders, and business partners, for which we are extremely grateful, especially during these challenging times. Furthermore, the government’s support will contribute to help securing jobs and maintain healthy competition within the aviation sector.”
Founded in 1993, Norwegian began operating as a low-cost carrier using Boeing 737s in 2002 and branched out into the long-haul market in May 2013.