Battered low-cost carrier Norwegian has said virtually all of its fleet will likely remain grounded until 2021.
The news comes as the airline seeks to persuade shareholders to accept a government-backed rescue plan that will wipe out most other investors.
Norwegian said it expects bondholders, aircraft lessors and shareholders to take a hit in order for the airline to access around £230 million in state bailout funds.
Currently just seven of a fleet of 147 planes are operating, largely on state-subsidised domestic flights in Norway and mainly for essential cargo.
The airline, plagued by debts after years of over-expansion, sad it was planning for a “New Norwegian” to emerge.
The new carrier would focus on key profitable routes, jettisoning long-haul routes to secondary airports, and using a fleet up to a third smaller than previously planned.
Bondholders will later this week decide whether to accept the strategy and allow the debt to be converted into equity, a necessary move if Norwegian is to gain access to state funds.
Aircraft lessors will also be asked to take equity in the company, rather than pursue debts.
The airline is looking to reduce its obligations on leasing planes by £400 million.
Shareholders will vote on the proposal at an emergency general meeting on May 4th.
If the plan is approved, new shares will be issued on May 11th, which will reduce the value of current shares by another 95 per cent.
The carrier grounded its fleet in mid-March due to coronavirus travel restrictions, and has temporarily laid off more than 80 per cent of its workforce.