Norwegian shares soar on $550m coronavirus rescue

Shares in Norwegian Air Shuttle shot up by 28 percent on Friday after Norway's parliament on Thursday agreed 6bn ( $550m) Norwegian kroner in loan guarantees for the country's airlines.

Norwegian shares soar on $550m coronavirus rescue
Norwegian was already financial strained after betting big on low-cost long haul flights. Photo: Norwegian
Fully half of the emergency loan package, or 3bn NOK ($278m) has been allotted to Norwegian, 1.5bn NOK will go to SAS, and the remaining 1.5bn NOK will be shared between Widerøe and other, smaller airlines. 
“There are difficult times for the airline industry, but we believe this is a package that will make it easier for it to get through a demanding time,” Industry Minister Iselin Nybø said as she announced the package on Thursday evening. 
Norwegian chief executive Jacob Schram said he was “very grateful” for the government aid: “We think it is very positive that the Norwegian authorities have come up with a package of measures for aviation in Norway.” 
“We have been clear that we need liquidity and that we need it quickly,” he said, adding: “We will turn around now and get started on this tomorrow.” 
Norwegian chief executive Jacob Schram. Photo: Norwegian. 
The funding for Norwegian is structured into three stages: 
  • A no-strings-attached NOK 300m loan guarantee which requires only that the airline finds commercial banks to take on 10 percent of loan. 
  • A second stage, which provides 1.2bn NOK on the condition that the airline's creditors agree to waive interest payments and other charges for three months. 
  • A final 1.5bn kroner stage, which requires the airlines to raise money through issuing equity. 
SAS chief financial officer Torbjørn Wist also welcomed the package, describing it in a press release as “a constructive proposal that gives SAS respite in a challenging situation”. 

Member comments

  1. Looking forward to seeing how thankful Norwegian are, I doubt much when it comes to baggage allowances etc. Having to fight them for compensation when they choose to ignore EU law for as long as possible. Don’t get me wrong, I like the airline but only when things are working, once something is wrong they are very difficult to deal with.

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‘We agree to disagree’: Still no progress in marathon SAS strike talks

By lunchtime on Friday, talks between the Scandinavian airline SAS and unions representing striking pilots were still stuck on "difficult issues".

'We agree to disagree': Still no progress in marathon SAS strike talks

“We agree that we disagree,” Roger Klokset, from the Norwegian pilots’ union, said at lunchtime outside the headquarters of the Confederation of Swedish Enterprise in Stockholm, where talks are taking place. “We are still working to find a solution, and so long as there is still some point in continuing negotiations, we will do that.” 

Mats Ruland, a mediator for the Norwegian government, said that there were “still several difficult issues which need to be solved”. 

At 1pm on Friday, the two sides took a short break from the talks for lunch, after starting at 9am. On Thursday, they negotiated for 15 hours, breaking off at 1am on Friday morning. 

READ ALSO: What’s the latest on the SAS plane strike?

Marianne Hernæs, SAS’s negotiator on Friday told journalists she was tired after sitting at the negotiating table long into the night. 

“We need to find a model where we can meet in the middle and which can ensure that we pull in the income that we are dependent on,” she said. 

Klokset said that there was “a good atmosphere” in the talks, and that the unions were sticking together to represent their members.

“I think we’ve been extremely flexible so far. It’s ‘out of this world’,’ said Henrik Thyregod, with the Danish pilots’ union. 

“This could have been solved back in December if SAS had not made unreasonable demands on the pilots,” Klokset added. 

The strike, which is now in its 12th day, has cost SAS up to 130m kronor a day, with 2,550 flights cancelled by Thursday, affecting 270,000 passengers.