There is no doubt that we still need help towards the end of the year to get through the winter, says CEO Jakob Schram at the press conference.
Norwegian had a turnover of around NOK 7 billion in the first half of this year. This is a decrease of 65 percent from the previous year.
This is shown by the company’s recent half-year report.
The airline’s deficit increased by 157 percent compared to last year. At that time, the company had a deficit of NOK 1.9 billion.
In total, the company has a loss of NOK 4.8 billion before tax so far in 2020.
71 percent fewer passengers
– We consider this a neutral report for Norwegian, writes Ole Martin Westgaard in DNB Markets in an e-mail to NRK. He believes a neutral stock price reaction is justified.
At 09:02 on Friday morning, the Norwegian share will fall by 4.88 percent.
In the stock exchange announcement , the company writes that it is strongly affected by the corona pandemic.
– At the beginning of 2020, we expected a positive result and the best summer ever, thanks to successful cost-saving initiatives and more efficient operation, says Schram in the report.
– Then we were hit by covid-19 and demand literally stopped from one day to the next.
Norwegian has had a fall in passengers of 71 percent.
5.31 million passengers flew with Norwegian in the first six months of this year, compared with 18 million passengers in the first half of 2019.
A loan guarantee from the government is not enough
In addition, about 8,000 employees have either been laid off or laid off.
In May, the crisis-stricken airline carried out a restructuring . The company then entered into an agreement with the creditors to convert debt into shares.
Before the crisis plan was approved by shareholders and bondholders in the company, Schram told NRK that the company would go bankrupt without it.
The shares in question have been locked over the summer, but will be “released” on the market in three rounds during the autumn. One third of the shares came earlier in August.
In addition, the government introduced loan guarantees to the crisis-stricken airlines in Norway early in the corona crisis. In the message, Schram writes that the loan guarantee scheme is not enough.
– We see that many of our main competitors receive significant liquidity support from their governments as aviation represents the backbone of the infrastructure. We are grateful for the loan guarantee made available to us by the Norwegian government, which we worked hard to get. But, given the current market conditions, it is not enough to get us through the crisis, says Schram.
Billion deficit in the first quarter
Earlier in August, Sweden’s central financial administration notified the Debt Office that the Swedish part of the Norwegian Group had its application for a credit guarantee rejected by the Debt Office.
This is because the Debt Office does not believe the airline was financially viable at the end of 2019.
At that time, the entire group had a turnover of NOK 8.9 billion and a loss of NOK 2 billion.
In July, more than 350,000 passengers traveled with Norwegian. It was three times more than in June, but 90 percent lower than July in 2019.
The company’s accounting update for the first quarter, ie the first months of the year, showed a loss before tax of NOK 3.3 billion.
In the past year, the share price of Norwegian has fallen by 96 percent.
Source: www.nrk.no
