The Norwegian low-cost airline Norwegian can finally breathe a sigh of relief – the state government has released the long-awaited loan.
The low-cost airline Norwegian has announced that the Norwegian government has finally released the required loan. With some conditions, the airline can go confidently into 2021 and begin the restructuring program, as reported by bloomberg.com. Thus the airline manages to leave the bankruptcy proceedings.
The long-needed rescue
The corona pandemic hit the ailing airline Norwegian at the wrong time. Due to global travel restrictions, the Norwegian low-cost airline found itself at the mercy of bankruptcy. After the airline has now announced that it is finally giving up the high-deficit long-haul business, the Norwegian government has now approved the loan. This gives the airline the opportunity to end the insolvency proceedings.
With a new business plan, and a participation from the government, we are confident we can attract investors and get through the examinership and reconstruction process.
Jacob Schram, CEO Norwegian Air Shuttle ASA
With the new loan, they want to return to their old strength and serve the low-cost market in Europe – the share price rose immediately by 18 percent. Norwegian urgently needs this as it, like most other airlines, has been hit hard by the pandemic. Even the elimination of over 2,000 jobs could not help the airline for the time being.
New business plan for 2021
As a result, the airline was already dependent on this loan from the state at the end of last year. At the time, the government refused, fearing that it could be invested in the airline’s long-haul fleet. Only a short time later, the airline had to open bankruptcy protection proceedings. Following this, the airline did everything it could to keep operations going.
Now the airline will receive around 550 million euros consisting of various loans and bonds and invest them in the new fleet and the new route network. With 51 narrow-body aircraft for the time being, they want to concentrate on their own roots again and offer routes across Europe. The fleet is expected to grow to 70 aircraft by next year.
So far, Norwegian has only operated a Boeing fleet. With the elimination of low-cost long-haul routes, the airline is using its previous Boeing 737-800 and MAX 8. The A320neo and A321LR that have already been ordered will join them in the near future. A large order for 110 aircraft from Boeing was canceled at the end of last year. In addition to various holiday destinations and metropolises in the north, Norwegian has also flown to several airports in German-speaking countries such as Berlin, Düsseldorf, Munich and Vienna.
Conclusion on the state aid for Norwegian
Norwegian can finally breathe a sigh of relief and finally start again with the new loan. This can also be successful as the airline has realized that low-cost long-haul routes can no longer be part of the strategy – a risky issue for many airlines. In all likelihood, the airline will remain in Europe and will continue to offer many travelers an interesting and affordable alternative to many other airlines.
Would you like more reisetopia articles? Then follow us:
––
–
The most important travel news from Switzerland directly in your e-mail inbox? With our newsletter – guaranteed free and cancelable!
–
–
One more step necessary
Thank you for your registration – check your emails now to confirm your registration.
–
––
–
