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Published on Tuesday, November 10, 2020

Norwegian makes deeper cuts in fight for survival






 


Norwegian Air has furloughed a further 1,600 staff and cut its network to just a handful of domesitc routes after Norway's government rejected the airline's application for more state aid.


The airline is warning that it will run out of money in the first quarter of next year without further support.
Norwegian made a third-quarter operating loss of NOK2.8bn compared to a NOK3bn profit in the same period last year.


Its cash reserves dwindled during the summer lockdown to around £285m by the end of September. In its third quarter earnings report today, Norwegian said it is dependant on additional capital to continue to work in Q1 2021.


Chief Executive Jacob Schram said: "Our third-quarter results clearly show that the effects of the global COVID-19 pandemic continue to heavily impact our operations and financial position."


It has cut its workforce from 10,000 to only 600 and parked 15 out of 21 of its aircraft.


Schram said: "This is a sad day for everyone at Norwegian and I sincerely apologise to all our colleagues that are now affected, but there is no other alternative.


"Our goal is to keep six aircraft on domestic routes in Norway, and I expect that Norwegian will also receive route support from the Ministry of Transportation, as previously announced."


The carrier received £250 million-worth of finance at the start of the crisis in March in a deal which required banks and aircraft leasing firms to agree to a £1.2 billion debt for equity swap.

But the Oslo government's industry minister said yesterday that no further aid would be forthcoming.

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