Agents can book Norwegian ‘with confidence’

Norwegian Air insists agents can book “with confidence”, saying a shortfall in cash has “improved” since card acquirers halted credit-card payments to the carrier late last year.

The airline admitted it needs cash to “create headroom” as it unveiled plans to raise NOK 3 billion (£272 million) through a rights issue – an offer of additional shares to existing shareholders – and confirmed: “Some acquirers had taken the decision to hold back payments.”

Norwegian’s reassurance came as Berlin-based Germania, which flew charters for Tui and Thomas Cook in Germany, filed for bankruptcy.

Card acquirers process payments for airlines, agents and others, and Alan Bowen of the Association of Atol Companies (AAC) warned the withholding of payments “can be fatal”.

But Norwegian insisted: “The situation has now improved and is stable.”

A spokesman told Travel Weekly: “Hold-backs are a regular practice in the industry, as was the case during the last few of months in 2018. This has improved in line with our liquidity situation and the recent announcement of the rights issue. Agents can continue to book Norwegian on behalf of customers with confidence.”

Bowen said: “Processing card payments is critical for an airline dependent on direct sales. Your cashflow becomes zero if you’re a direct-sell business – you can be entirely dependent on card processors.”

Norwegian revealed an operating loss of NOK 2.2 billion (£200 million) for 2018 as it confirmed plans to curb expansion, redirect aircraft deliveries and shut bases.

A sale of budget carrier Norwegian failed to materialise last year amid Brexit uncertainty, it has been reported.

Chairman Bjorn Kise said that he and CEO Bjorn Kjos, who is also a major shareholder, had a plan to sell the airline to an unnamed bidder before Christmas.

Norwegian today revealed a 13% rise in January passenger carryings to more than 2.6 million over the same month last year.

Kjos said: “We are very pleased with the continued passenger growth in January, a month traditionally characterised by less demand.

“Norwegian has been through a period with significant growth, but now the company will change its strategic focus from expansion and growth to profitability.”


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