Coronavirus: Norwegian Air agrees first stage of lifeline financing

Norwegian Air has secured the first stage of rescue financing as part of a state aid lifeline to protect against the threat of coronavirus.

Two Nordic banks have agreed to provide a guarantee for the required 10% for the first tranche of Nok 300 million (about £23 million).

Norwegian will secure the necessary headroom “to pursue further guarantees from the Norwegian government”.

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The Oslo government proposed a guarantee of Nok6 billion (£460 million) for the Norwegian airline industry last Thursday, of which up to Nok3 billion is directed to Norwegian Air.

The airline has already temporarily laid off 90% of its workforce and will continue to implement additional cost measures going forward.

Most of the fleet is grounded and the carrier has reduced its operations to a minimum.

The airline will now primarily operate within Norway and Sweden and between the Nordic capitals, “in order to deliver on its corporate responsibility of maintaining critical infrastructure so that people and necessary goods and medical supplies can be transported during this unprecedented crisis”.

The limited schedule will remain in place until further notice.

Norwegian Air has also run repatriation flights together with the authorities in order to get people back home to Norway, Denmark and Sweden.

Norwegian Air said: “The government guarantee scheme is crucial for the company as the current state of the capital markets in combination with the challenging times for the airline industry limit the options available.

“The first Nok300 million will create necessary headroom to pursue the remaining tranches of the guarantee scheme.”

The airline added: “Norwegian will update the market with its further plan of action and implications for its stakeholders as soon as the criteria and terms have been finalised.”

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