The low-cost airline Norwegian has thanked the government in Oslo for proposing a second state-funded bailout following several weeks of intense negotiations. The offer, which is still dependent on Norwegian securing additional funding from outside investors, comes just several months after Prime Minister Erna Solberg’s government refused a second bailout, saying it would be bad for competition.
“The government is positive about contributing money to a reconstructed Norwegian, but assumes that private investors show up,” a government statement released on Thursday morning explained.
Norwegian hopes to secure between four and five billion Kroner in additional capital from investors as part of a radical restructuring plan that involves the airline offloading its entire long-haul business. Thousands of workers across Europe, as well as in the United Kingdom and the United States have been made redundant as a result of Norwegian’s decision.
“The plan appears more robust than the one we said no to in October,” commented Norway’s minister of trade and industry Iselin Nybø. “That is why we are now positive about contributing.”
“If Norwegian succeeds with this work, the government has said that we can contribute with a hybrid loan. But it is a demanding process the company is undergoing,” she continued.
In October, Norwegian chief executive Jacob Schram slammed the government’s decision to reject a second plea for state financial support. On Thursday, however, Schram only had warm words to share about the government’s support.
“On behalf of everyone at Norwegian, I would like to sincerely thank the government for their support,” he commented. “The government’s support will contribute to help securing jobs and maintain healthy competition within the aviation sector.”
Norwegian entered a form of bankruptcy protection in Ireland called examinership late last year to ward off potential debt collectors as it restructures its business and works to secure more capital.
If the airline survives the Coronavirus pandemic, Norwegian plans to significantly shrink its fleet, operating just 50 short-haul aircraft in 2021 and hopefully increasing this number to 70 aircraft by 2022. The new business plan envisages Norwegian as focusing on its Nordic and European route networks.
Norwegian will be seeking buyers for its fleet of 31 Boeing 787 Dreamliners that were used to operate long-haul flights as part of the new business plan.
