The government of Norway has confirmed it will support low-cost carrier Norwegian through a contribution to new funding capital.

The airline said the decision would significantly increase its chances of working through the crisis caused by the Covid-19 pandemic.

In the mid-term, the carrier is seeking to position itself as a key player within Norwegian and European aviation.

“On behalf of everyone at Norwegian, I would like to sincerely thank the government for their support.

“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 chief executive, Jacob Schram.

Earlier this month, Norwegian unveiled plans to cut all long-haul services this year, as the carrier rebuilds a network focused on short-haul European routes.

The plan comprises a fleet of around 50 aircraft in operation this year, and to gradually increase to approximately 70 aircraft in 2022, pending demand and potential travel restrictions.

Under the proposals, debt will be reduced to around NOK20 billion, and the company will raise four to five billion NOK in new capital.

“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.

“Furthermore, the government’s support will contribute to help securing jobs and maintain healthy competition within the aviation sector,” added Schram.