Norway’s government offers hope to ailing airline Norwegian

Norway’s government offers hope to ailing airline Norwegian
Photo: AFP
The Norwegian government has said it is prepared to offer a loan to low-cost airline Norwegian, which is fighting to stave off bankruptcy.

The announcement represents a change of stance by Oslo, which had previously ruled out the possibility of assisting Norwegian, which is fighting high levels of debt.

Last week, the company presented a plan outlining a way out of its crisis, including a reduction of its debt to around 20 billion kroner, raising four to five billion kroner in capital, and using 50 aircraft this year and 70 next year.

It also said it would drop long distance routes and focus on services in Europe.

READ ALSO: Low-cost airline Norwegian drops long-haul services

The new plan appears to have won favour with the Oslo government.

“Norwegian’s new business plan comprises strong changes in the company’s debt structure and the addition of 4-5 billion kroner in capital,” business minister Iselin Nybø said in a statement.

“The plan appears to be more robust than the one we said no to in October. We are therefore taking a positive position with regard to contributing,” she added.

The government’s support means that Norwegian could receive a loan from the state. But the airline must still secure an overall recovery plan.

Already saddled in debt before the pandemic, the company, like the rest of the airline industry, has been hit hard by the restrictions aimed at limiting the spread of the new coronavirus.

It currently has bankruptcy protection in Ireland, where much of its debt is registered.

The bankruptcy protection for two of its main subsidiaries is a bid to shield itself from creditors long enough to find a solution for a financial restructuring.


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