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.
Norwegian has confirmed it will temporarily layoff 50 per cent of its workforce as flight cancellations spiral in the wake of the coronavirus outbreak – a number the low-cost carrier warned could increase
Norwegian will cancel approximately 3,000 flights between mid-March and mid-June as travel demand slumps in the face of the Covid-19 outbreak. This represents approximately 15 per cent of the total capacity for the period.
Norwegian has confirmed it will cancel a number of planned flights in response to the spread of the coronavirus. The low-cost carrier said it had decided to cancel 22 long-haul flights between Europe and the United States from March 28th to May 5th.
Norwegian is launching a new non-stop service from London Gatwick to Aktion Airport, which serves both Preveza and Lefkada in Greece. The first flight will depart on May 3rd.