Norwegian Air fears for his survival. The airline enjoys state aid, but according to the company this is not enough to get through the crisis. Norwegian’s piggy bank is expected to be empty at the beginning of next year. For that time, extra money is needed, otherwise there is a risk of bankruptcy.
Even before the crisis erupted, Norwegian was struggling. The price-fighter has experienced strong growth in recent years. It was the largest non-American airline that flew on major cities in the United States. But growth was also accompanied by mounting debt. This makes the company particularly vulnerable to the consequences of the coronacrisis. Earlier this year, debts and liabilities were converted into shares.
Norwegian reported a tax loss of DKK 4.8 billion in the first half of 2020, converted to EUR 457 million. There was some improvement in the second quarter. Despite the “reasonable prospects to avoid possible defaults”, the company sees a “significant risk” of bankruptcy. This happens if no agreement is reached with creditors, there is no access to working capital and the overall situation does not improve.
