Norwegian Air Shuttle unveils rescue plan

Embattled low-cost carrier Norwegian Air Shuttle on Thursday, December 3, unveiled the details of its restructuring plan aimed at rescuing it from bankruptcy.  

Among the measures are a downsizing of its fleet, debt conversion, and a rights issue of up to 4 billion kroner ($453 million, 374.5 million euros).

Norwegian, Europe’s 3rd biggest low-cost airline, has called an extraordinary general assembly for December 17 to seek shareholders’ approval for the measures.

“We’re in a difficult situation, but we are hard at work on a plan that will protect the interests of clients, employees, creditors, as well as the company’s shareholders,” Norwegian chief executive Jacob Schram said in a statement.

In the red since 2017, Norwegian has, like its rivals, been hit hard by the coronavirus pandemic, which has paralyzed air traffic worldwide.

The company, which employed 10,000 people and had 140 aircraft in service at the start of the year, now has just 600 employees still at work and 6 aircraft still flying.

The company has been struggling since long before the pandemic.

An ambitious expansion program saddled it with a mountain of debt – 48.5 billion kroner at the end of September.

The company has filed for bankruptcy protection in Ireland for two of its main subsidiaries in a bid to shield itself from creditors. A hearing is due on Monday, December 7, according to media reports.

The airline suffered a devastating blow on November 9 when the Norwegian government refused to give it more cash after granting the company guarantees of 3 billion kroner (277 million euros) earlier this year.

It is now trying to survive long enough for the mass rollout of COVID-19 vaccines to take effect, which could reboot global air traffic, and perhaps get more help from the government, which could agree to dig into its pockets in January amid pressure from the opposition.

Norwegian’s share price, which has lost 99% of its value since the beginning of 2020, was up nearly 12% on Thursday’s news on the Oslo exchange at midday. – Rappler.com