Norwegian Air to get financial support from Norway’s government
Capital funding contribution will only come if airline meets conditions
Norwegian, like most other airlines, suffered a body blow after the pandemic grounded countless flights and plunged the industry into crisis. Photograph: iStock
Norway’s government has agreed to provide financial backing for troubled airline Norwegian Air Shuttle provided it meets a number of conditions.
The airline confirmed the government had agreed to contribute to new capital funding to help keep it in business after previously rejecting a request for a rescue package. Norwegian did not specify what conditions the government had imposed in return for the aid.
In a statement the airline said the decision significantly increased Norwegian’s chances of working through the crisis caused by the pandemic.
“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 Norwegian chief executive Jacob Schram.
“We still have a lot of work ahead of us, but a participation from the government underscores that we are heading in the right direction.”
Norwegian, like most other airlines, suffered a body blow after the pandemic grounded countless flights and plunged the industry into an historic crisis. The company has already cut thousands of jobs and reduced the scale of its business, most recently abandoning its long-haul model, in an effort to save money.
The government had rejected Norwegian Air’s request for a second multi-billion krone rescue package on November 9th, leading the carrier to file for bankruptcy protection less than 10 days later and embark on a restructuring plan.
The expression of support from the Norwegian government comes a day ahead of an Irish court hearing as part of the carrier’s examinership process on Friday. The company says that with government support it is confident of attracting investors and get through the examinership and reconstruction process.
– Additional reporting: Bloomberg