Having survived a near-death experience during the Covid-19 lockdown, low-cost carrier Norwegian has unveiled plans to return to operation. The airline will operate flights from London Gatwick and Edinburgh to Oslo and Copenhagen from July 1st.
Norwegian chief executive, Jacob Schram, has announced a new management structure for the low-cost carrier. The decision follows a successful financial reorganisation of the airline, which allowed for access to £230 million in support from the Norwegian government.
Norwegian has completed a complex restructuring allowing the low-cost carrier to access a state loan guarantee of £230 million. However, the coming months will remain “challenging,” the airline said earlier.
Reports suggest shareholders have backed key elements of the proposal, with about 95 per cent of votes cast supporting converting debt into equity.
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.
Pilot and cabin crew companies owned by low-cost carrier Norwegian in Sweden and Denmark have filed for bankruptcy. The move comes against a backdrop of the ongoing spread of Covid-19, with most countries having advised against or banned non-essential travel.
Norwegian has unveiled plans to strengthen its balance sheet by converting debt to equity in order to meet the requirements of the Norwegian state guarantee program.
The global outbreak of Covid-19 has decimated the latest traffic figures from Norwegian. The company experienced a dramatic drop in demand last month following government-imposed travel restrictions and a general travel decline.
Having previously pledged to work with carriers to overcome the financial difficulties created by the coronavirus pandemic, chancellor Rishi Sunak has now advised airlines to find other forms of funding.
The Norwegian government last week proposed a guarantee of NOK6 billion for the Norwegian airline industry, of which up to NOK3 billion is directed to Norwegian. The guarantee scheme will consist of three tranches with a maximum two years maturity.
The government of Norway has moved to support the flatlining aviation sector in the country, offering more than US$550 million in bailout funds. Some US$250 million will be directed at embattled budget operator Norwegian.
Norwegian will gradually cancel most of its flights and temporarily lay off a majority of its workforce due to stagnating demand and enforced travel restrictions in the wake of the Covid-19 outbreak.