Budget carrier Norwegian Air’s future hangs in the balance after the Oslo government rejected a plea for further bailout funds.
The airline has made a financial restructuring of NOK 18 billion from debt to equity since the start of the Covid pandemic in March.
But the government of Norway today announced that the carrier will not receive further financial support needed “to maintain operations throughout the Covid-19 crisis”.
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The airline admitted it is “now facing a very uncertain future” putting 2,300 staff in Norway and several thousands in other countries at risk.
Chief executive Jacob Schram said: “The fact that our government has decided to refrain from providing Norwegian with further financial support is very disappointing and feels like a slap in the face for everybody at Norwegian who is fighting for the company when our competitors are receiving billions in funding from their respective governments.”
“We are a part of Norway and Norway is a part of us. This is the way it has been for almost 20 years.
“The support that we have received from our customers throughout all these years has meant a lot to us, in particular now during the Covid-19 crisis.
“We offer routes from Kristiansand in the south to Svalbard in the north, routes that cannot be replaced overnight. It will take time and it will have consequences for the competitive situation in Norway, like we have seen before.
“We also notice that airlines across the world that are also dependent on support to survive, are receiving billions from their respective authorities.
“Based on the number of tourists we fly to Norway, we contribute to sustaining 24,000 people in our country and boost the local economy by approximately NOK 18 billion per year.
“That alone clearly demonstrates that even moderate financial support would constitute a profitable investment for Norway.
“How anyone could come to a different conclusion is impossible to understand.
“The local travel industry and businesses have again and again emphasised the importance of Norwegian’s route network. I recently visited all of our four bases in Norway and also met with local politicians and businesses.”
Norwegian Air, once the third largest carrier at Gatwick with a string of low-fare transatlantic routes, had anticipated a record summer before Covid hit.
Schram added: “We could clearly see the results of our hard work to go from growth to profitability, which was initiated in 2018.
“With further support to get Norwegian through this unprecedented crisis for the aviation industry, we would come out as a more sustainable and competitive airline, with a new structure and improved operation.
“Without support, the way forward has become much more uncertain. However, we will do whatever we can get through this crisis.”
More: Nationalisation considered for struggling Norwegian Air
Norwegian Air confirms plans to slash long-haul fleet
Norwegian Air needs ‘more cash’ to survive
