Norwegian Air Shuttle, a Norway based airline that averted bankruptcy earlier this year when debtors agreed to debt to equity swap, has reported third-quarter numbers that are 1B NOK (close to 100M euros) in red.
The airline yesterday was denied further financial support from the Government of Norway, and the airline immediately stopped processing refunds for canceled flights leaving passengers’ money in limbo.
Norwegian has decided to park 19 of the 25 aircraft it currently operates and lays off another 1,600 employees. The airline had, at the end of the third quarter, roughly 300 million euros liquidity left.
It is difficult to see a path forward for Norwegian unless Norway’s government decides that it is worth the country, highly dependent on air connectivity, to save the airline by taking a stake and recapitalizing it.
The airline may have 300 million euros left in liquidity, but how many unpaid refunds and other bills are outstanding?
The earlier rescue this year only managed to lower the debt load from 58B NOK (5.5B euros) to 48B NOK (4.5B euros). Not sure how the company can continue serving the debt.
It doesn’t help Norwegian Air Shuttle that a Hungarian discount airline based in the UK (got some UK government’s covid cash) Wizz Air has expanded into the domestic Norwegian market.