The airline Norwegian has presented a rescue plan to keep it flying. But that’s not good news for everyone.
The airline Norwegian is fighting for survival after the corona crisis has hardened on the company.
On Monday morning, Norwegian presented a rescue plan to avoid bankruptcy. Only until next year – in 2021 – will the red and white aircraft be seen outside Norwegian airspace. In other words, no Norwegian aircraft will depart from Danish airports until next year.
Norway’s plans to first reopen in 2021 are yet another negative surprise for air traffic. The reason why it lasts so long is that the summer season can already be considered dead because there is no permit to fly and that the winter season is traditionally low season for the airlines, says Ole Krohn, financial commentator on TV 2.
A saline injection of 2.7 billion kroner
The rescue plan is a convulsion that the company is doing to get part of a relief package from the Norwegian state, which will put 2.7 billion Norwegian kroner – equivalent to 1.76 billion Danish kroner – into the company.
Norwegian is extremely pressured. Based on that information, the money box is empty when we reach mid-May, so Norwegian is in a fire extinguishing exercise. Lenders must convert loans, leasing companies must repay debt, and a share issue must be made, says Jacob Pedersen, Sydbank’s stock analysis manager, to TV 2.
In addition, the fleet of aircraft must be reduced to between 110 and 120 aircraft. It was previously on 168 aircraft. This means that about every third plane should not fly.
You are close to going bankrupt, but with the positive feedback from lenders and leasing companies, there is reason to believe that Norwegian can ride the storm. It’s still a company struggling with beak and claws, the stock analysis chief says.
Analyst: The company struggles with beak and claws
The rescue plan does not come with any guarantees, says Ole Krohn:
We do not yet know whether Norwegian will succeed in avoiding bankruptcy. This requires the Norwegian state aid to fall into place, which is an important prerequisite for the company to survive.
Still, the stock analysis chief is confident about the company’s survival.
But it is a new Norwegian who will rise from the ashes, and it will be a very slow recovery of air traffic. Therefore, it is very logical that you as a traveler cannot expect many Norwegian flights from Danish soil, says Jacob Pedersen.
Unsure if SAS is soon on the wings
Danish air travelers are still in limbo, as several of the other heavy air travel providers have not heard from them yet.
The other major player at Copenhagen Airport is SAS, and they have not announced when they will see a reopening. So it is uncertain whether, with their better financial situation, they could possibly get on the field a little sooner, says Ole Krohn.
On Thursday, the rescue plan must be approved by the company’s shareholders.
Four sub-companies went bankrupt last week
Last week, it was revealed that Norwegian declared four cabin and pilot companies bankrupt – including three Danish, and according to Finans , 614 employees in Denmark lost their jobs.
Source: nyheder.tv2.dk
