Norwegian Air’s survival depends on the approval of its latest restructuring plan by creditors and shareholders at a series of meetings in the coming days.

Existing shareholders in Norwegian Air must agree to their holdings being reduced to a combined total of 4.6%.

And 17 classes of creditors, including 1,600 unsecured creditors and 34,000 customers seeking refunds, must agree at 17 separate meetings to receive just 5% of what they are owed plus a ‘pro rata’ share-out of a NOK 500 million (€50 million) ‘cash pot’.

Pending the agreement of shareholders and creditors, the restructuring plan would then need to be signed off by courts in Ireland and Norway where the carrier is in bankruptcy protection.

After that, Norwegian would seek to raise a minimum NOK 4.5 billion (€446 million) in new capital which, if the fundraising is successful, would release a further Norwegian government loan guarantee of NOK1.5 billion (€149 million).

The carrier has already received  NOK 3 billion (€278 million) from the Norwegian state.

The new capital would provide the ‘cash pot’ to share among creditors.

Details of the financial proposals were sent to shareholders and creditors this week and multiple meetings are scheduled on March 18-19

Norwegian Air chief executive Jacob Schram insisted the administration authorities in Ireland and in Norway “believe this plan is in the interest of the creditors and shareholders of the company”.

Chief financial officer Geir Karlsen said: “If everything goes according to plan, we will be able to carry out the capital raise in May.”

The proposal sent to shareholders and creditors notes: “The trading performance of Norwegian Air Shuttle and the wider group was under pressure before the onset of the coronavirus pandemic.

“The group suffered significant losses during each of the 2017, 2018 and 2019 financial years.”

However, the proposal also notes the ‘independent expert’ appointed by the Irish High Court under the Examinership (administration) process in Ireland “expressed the opinion that the companies had a reasonable prospect of survival as a going concern provided the creditors accepted and the Irish Court approved [the] schemes of arrangement”.

Norwegian Air put its transatlantic operation into administration in January and, if it survives the administration process, will return as a short-haul carrier focussed on Norway and the Nordic markets.

United Airlines chief executive Scott Kirby said this week: “There were players in the Atlantic [market] who have never made money.”

Speaking at a CAPA Centre for Aviation online summit, Kirby did not mention Norwegian Air by name but said: “They had a business model that had no chance of ever making money and it was just a matter of how long they were going to keep burning the furniture to keep flying and pricing the product below their costs. They have gone.”