News

Norwegian Secures €260m State Aid Following Restructuring

Norwegian Secures €260m State Aid Following Restructuring

Norwegian has completed a complex restructuring allowing the low-cost carrier to access a state loan guarantee of NOK3 billion (€260 million). The company has now converted NOK12.7 billion of debt to equity.

Jacob Schram, Chief Executive, said: “Now that we can access the state loan guarantee, we can continue to transform the company. Through this process, the belief in New Norwegian and the company’s strategy have been confirmed by shareholders, the market, bondholders, leasing companies, other creditors and lenders.

“Nevertheless, the months ahead will remain challenging and with a high degree of uncertainty for the industry. Norwegian will still need to collaborate closely with a number of creditors as the company currently has limited revenues.”

The recent financial moves virtually wiped out existing shareholders, including Bjorn Kjos, founder and former chief executive of the airline.

Since the end of 2018, Norwegian has taken significant actions to restructure its operations and return to profitability. The company was on the path to deliver a positive net profit in 2020, and this summer was set to be the strongest in its history. Instead, the coronavirus outbreak and global travel restrictions has led to a substantial drop in demand.

The company has sought to use this time as an opportunity to restructure and develop a new strategy and business plan – New Norwegian – for a strengthened airline to re-emerge when travel restrictions are lifted, and demand returns.

“In addition to securing that the company survives this crisis, our goal has been that Norwegian should have a strong position in the future airline industry, with a clear direction and strategy,” added Jacob. “This will ensure sustainable operations and a structure that will be to the benefit of both shareholders, customers and colleagues.”

Click to add a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News

NEIL STEEDMAN has been a trade journalist, editor and proofreader for 53 years, and ITTN's News & Features Editor for 43 years. His travel blog is at www.thetravelbuddhist.com.

More in News

What’s Another Green List?

Neil SteedmanSeptember 18, 2020

Unprecedented Industry Appeal to EC President to End Quarantines and Develop Common EU Testing Protocol

Neil SteedmanSeptember 18, 2020

Cork is First Irish Airport to Achieve ACI Airport Health Accreditation

Neil SteedmanSeptember 17, 2020

Revised Interim Green List Expected from Government

Neil SteedmanSeptember 15, 2020

WTM London and Travel Forward Will Be Virtual-Only Shows

Neil SteedmanSeptember 15, 2020

Ireland faces €800 million loss again in 2021 without inbound international tourism – ITOA

Michael FloodSeptember 15, 2020

Etihad Airways Introduces Global Covid-19 Insurance

Neil SteedmanSeptember 15, 2020

Lufthansa repays record number of refunds worth €2.7bn

Michael FloodSeptember 15, 2020

Travel agents able to access Air France-KLM NDC services through the Amadeus Travel Platform

Michael FloodSeptember 15, 2020

Copyright © 2019 Belgrave Group Limited, C4 Nutgrove Office Park, Nutgrove Avenue, Rathfarnham, Dublin 14, Ireland