Just as Norwegian Air finally convinced lenders to extend its debt, oil prices shot up and posed more new costs to the struggling airline. Its stock price took off and then dove on the news, giving little relief to its finance director and acting CEO Geir Karlsen.
When asked by Oslo newspaper DN whether he had any summer holiday at all this year, he replied with a laugh, “Three days!” He was simply too busy trying to save the airline that’s been hit hard by a string of problems in recent years. Things got so bad that it actually offered lenders its landing rights at London’s Gatwick Airport as security.
Karlsen and other Norwegian executives could finally breathe a sigh of relief this week when lenders accepted new loan agreements and postponed payback of NOK 3.4 billion by up to two years. Between now and then, Norwegian’s profitablity and liquidity is expected to improve and it hopes to be able to resume flying its fleet of 18 new Boeing 737 Max aircraft that have been grounded along with all others following two fatal accidents. That forced trans-Atlantic route cuts, in order to reduce the need to hire in replacement aircraft.
Karlsen has experience in debt work-out plans from previous jobs as finance director for the tanker company Golden Ocean and rig company Songa Offshore. He joined Norwegian early last year when it was recovering from a crippling pilots strike and problems with other new Boeing aircraft. Now he’s charged with securing long-term financing for the airline, not least since its founder Bjørn Kjos stepped aside earlier this year, and can’t rule out another stock issue as speculation over an acquisition of merger with another carrier persists.