Norwegian Air gets state backing for restructuring plan
The Norwegian government has decided to back Norwegian Air’s survival plan, a boost to the embattled carrier’s survival plans.
The airline sought the help of ministers last week after unveiling a recovery plan which would see it cut its fleet to 50 planes and stop long-haul services.
In a statement, the carrier said that officials had decided to support the plan and would help raise fresh capital.
Norwegian is planning to cut its hefty debt pile to 20bn krone (£1.7bn), and raise 4-5bn krone in new cash.
Industry Minister Iselin Nyboe said that the government’s participation would hinge on whether private investors also put money in.
“The plan appears more robust than the one we rejected last October and we are therefore inclined to contribute,” she said.
She added that the government had no intention of becoming a shareholder in Norwegian, as has happened to other carriers like Lufthansa.
Chief executive Jacob Schram said: “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.”
The airline is currently under bankruptcy protection granted by Irish court as it seeks to restructure its operations.
As a result of stopping its long-haul services, around 2,000 staff will lose their jobs, including 1,100 in the UK.
Norwegian will also close its base at Gatwick airport.