Troubled low-cost long-haul airline Norwegian has asked its bondholders for more time to pay off two outstanding loans valued at $380 million. In return, the airline said it would offer its lucrative take-off and landing slots at London’s Gatwick airport as security. It’s believed that the bonds were due to be repaid in full by December.
Last month, the airline announced that it had sold its stake in a Scandanavian bank in order to shore up its finances by around $246 million. However, at least one analyst questioned Norwegian’s ability to keep afloat for any longer than nine months if the airline didn’t raise even more cash.
In a statement posted to the Oslo stock exchange, Norwegian said it was on track to achieve a multi-million dollar cost-cutting initiative and still hopes to hit revenue targets for the year. However, the airline has been hit hard by the worldwide grounding of the Boeing 737MAX and ongoing Rolls-Royce engine issues with its 787 Dreamliner fleet.
To add to its woes, some credit card issuers have decided to hold back greater percentages of ticket sales until passengers have actually flown with the airline. Although this has been well documented, the issue has been having a negative impact on Norwegian’s working capital.
Norwegian says it is having “ongoing discussions with lessors with the goal to defer payment schedules. Well publicised discussions with aircraft and engine manufacturers are ongoing, all with the goal of significant liquidity ease.”