Norwegian low-cost airline ‘has been saved’, says chief executive

Low-cost carrier Norwegian Air Shuttle has been saved, its chief executive said, adding it had “written history” after the ailing airline struggled with the fallout from the coronavirus pandemic and a debt restructuring plan.

Jacob Schram said Norwegian had “successfully” concluded a rescue plan after it raised 6 billion kroner (£508 million) through the sale of perpetual bonds, new shares and a rights issue.

In January, the Oslo-based airline said it was ending its long-haul operations and was focusing instead on European destinations. The company then presented a plan that cut its fleet from 140 aircraft to about 50.

In a statement, Norwegian said it had reduced its total debt by approximately 63-65 billion kroner (£5.3 billion-£5.5 billion) to around 20 billion kroner (£1.69 billion) under a plan that had to be approved by bankruptcy courts in Ireland, where its planes are registered, and in Norway.

The courts, which approved the plan, demanded that the airline raise at least 4.5 billion kroner (£381 million) as part of a programme to emerge from bankruptcy protection in the two countries, which happened on Wednesday.

The airline, whose fleet was mostly grounded as the pandemic caused a near-total halt to global travel, also terminated aircraft orders with Boeing and Airbus, worth approximately 85 billion kroner (£7.2 billion) in aggregated value.

In May 2020, the carrier received 3 billion kroner (£254 million) in loan guarantees from the Norwegian government as part of a restructuring plan.

In January, the government in Oslo gave another a 1.5 billion kroner (£127 million) in loans as long as the ailing company raised at least 4.5 billion kroner from other investors.

The government set several conditions for participating in the restructuring, including that the company must get new capital from private investors.

Chief financial officer Geir Karlsen told Norwegian news agency NTB that the last year, and especially the past six months, had been intense.

“We have negotiated with 30-40 large banks and several thousand creditors,” he was quoted as saying.