Crisis-plagued Norwegian Air has become the latest to report crippling losses, and ask for even more emergency state financial aid than it’s already received. Norwegian’s CEO Jacob Schram says extra help is needed to get it through the winter.
The airline, still mostly grounded by the Corona crisis, lost nearly NOK 5 billion in the first half of 2020. That’s even more than Scandinavian Airlines (SAS) lost in what amounted to its worst results ever in the normally high-flying spring and summer seasons. Both airlines are trying to hang on to their cash, and have been slow to issue refunds for all their cancelled flights since the Corona crisis hard in mid-March.
“There’s no doubt we still need help towards the end of the year to get us through the winter,” Schram said at a press conference in Oslo Friday morning when presenting Norwegian Air’s results (external link to Norwegian’s own website). Norwegian’s first-half revenues of around NOK 7 billion were down nearly 65 percent from the same period last year. Passenger counts declined 71 percent, 8,000 of its employees have been laid off and 140 aircraft are grounded.
Even though Norwegian’s results were in line with analysts’ expectations, Schram made it clear that the loan guarantees it received from the state last spring, along with debt-to-equity pacts it struck with creditors, are not enough. Now the airline needs more liquidity, he said, and newspaper DN reported that the airline needs to cut its fleet of new aircraft as well, at a time when they may be hard to sell.
The Norwegian government is considering more Corona crisis aid packages later this year. Schram still thinks Norwegian “can earn money” again from April next year, when hopefully a Corona vaccine will be available and traveling can resume.