Norwegian Air, teetering on the verge of bankruptcy, moved closer to survival on Sunday after it won support from key lenders. That’s important in the airline’s struggle to cut debt and acquire enough capital to satisfy the terms of a state crisis package worth NOK 3 billion.
Norwegian’s CEO Jacob Schram told news service E24 that the airline was thus “one step closer” to securing the state’s assistance, offered through loan guarantees, that are “critical” in order to “get through this crisis.”
The airline still needs to get its shareholders to accept its survival plan as well, at an extraordinary shareholders meeting on Monday. They face seeing their holdings diluted in the plan. The alternative is bankruptcy, when their holdings would be wiped out.
The airline is currently flying less than 10 routes, down from nearly 200 before the Corona virus crisis grounded airlines all over the world. Schram has claimed that despite its heavy debt and history of financial problems, the airline was poised for its best summer season ever before Corona hit. It also had already decided to cut unprofitable routes and pare down.
Schram now believes the airline can survive in a reduced format, still running some intercontinental and European flights but going back to its roots with domestic flights in Norway seen as its core business.