The Norwegian government will not give any additional support to the financially plagued price fighter Norwegian Air. According to the industry and Transport ministers, further support for the airline would be ‘not responsible use’ of public money.
Norwegian has repeatedly expressed fear for its survival as a result of the coronacrisis. The company’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. The company mainly looked to the Norwegian state for emergency aid.
Even before the crisis erupted, Norwegian was struggling. The price-fighter has experienced strong growth in recent years, but it has also been 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.
By obtaining that essential financing, the company also gained access to DKR 3 billion (EUR 277 million) of credit, with the Norwegian state guaranteeing it. This would prevent another bankruptcy. To get money, Norwegian might decide to sell planes. More debt could also be converted into equity. It’s not known how much money Norwegian wants to collect.