The Norwegian government is to give further financial support to Norwegian Air, subject to certain conditions, which the airline says will “significantly increase Norwegian’s chances of working through the crisis”.
The airline announced recently it would permanently ditch the long-haul, low-cost model that had been the hallmark of its operations.
Norway’s minister of trade and industry Iselin Nybø said in a statement, “The plan appears more robust than the one we said no to in October. That is why we are now positive about contributing.”
The government’s support, in the form of a hybrid loan, is dependent on the carrier bringing in other long-term, strategic owners and more than half a billion dollars of new capital.
“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. 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,” said Norwegian CEO, Jacob Schram.
The airline’s plan is based on a simplified business structure with a focus on a European route network with a fleet of around 50 aircraft in operation this year, and approximately 70 aircraft in 2022, pending demand and potential travel restrictions.
“With a new business plan, and a participation from the government, we are confident we can attract investors and get through the examinership and reconstruction process. We have received extensive support from political parties, customers, colleagues, shareholders, and business partners, for which we are extremely grateful, especially during these challenging times,” added Schram.