Norwegian Air buys itself some time

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Norwegian Air has succeeded in securing new financing for its aircraft purchases. It sent out an update to the market on Christmas Eve, claiming it now had the funding needed to cover all aircraft due for delivery during the first half of 2019.

Newspaper Dagens Næringsliv (DN) has reported how analysts have been concerned that Norwegian Air, burdened by debt acquired through its rapid fleet expansion, may violate the terms of existing loans from January 1. There was no news, DN noted, on the pending sale of as many as 140 aircraft, needed in order to boost the company’s capital reserves.

The airline will receive compensation for engine trouble it has had with its Boeing Dreamliner jets that often have produced nightmare situations for both Norwegian Air and its passengers. Norwegian reported that it has entered into an agreement with Rolls-Royce in connection with all the engine trouble that would have a “positive effect” on its results, but the amount of compensation was confidential.

The airline is still, however, expected to report weak fourth-quarter results, while its capital has fallen to the minimum level on some of its loans. It may, however, avoid any loan violations. Norwegian Air’s stock was steady on Monday prior to the market closing for the Christmas holidays. staff