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AIRLINE

Airline Norwegian posts 15 billion kroner loss after nightmare 2020

Low cost airline Norwegian has registered a loss of 14.9 billion Norwegian kroner for 2020, a year in which the company saw a drastic reduction in passenger numbers and was on the brink of bankruptcy.

A file photo of a Norwegian Air Shuttle plane in Finland.
A file photo of a Norwegian Air Shuttle plane in Finland. Heikki Saukkomaa / Lehtikuva / AFP

Low cost airline Norwegian has registered a loss of 14.9 billion Norwegian kroner for 2020, a year in which the company saw a drastic reduction in passenger numbers and was on the brink of bankruptcy.

The company published its annual results on Friday, revealing the huge operating loss.

Norwegian’s 2019 result, a loss of around 1.7 billion kroner, had put the company in a difficult position even prior to the outbreak of the Covid-19 pandemic.

The coronavirus outbreak and its consequent travel restrictions reduced the company’s passenger numbers to 6.9 million in 2020. That is 29 million fewer than in 2019.

Not all of the loss is due to fewer passengers. Around half of the company’s devaluation is attributed to a depreciation of the value of its aircraft fleet, news wire Ritzau reports.

“2020 was an exceptionally demanding year for air travel and for Norwegian,” CEO Jacob Schram said in a statement on the annual results.

“In light of that, the result for the fourth quarter (of 2020) is not surprising. Unfortunately, the majority of our employees are furloughed and many have lost their jobs – in part because of the closure of long distance services,” he added.

The company was already in debt prior to the pandemic and is now under bankruptcy protection in Ireland and is undergoing similar process in Norway.

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AIRLINE

Norwegian Air to seek bankruptcy protection in Norway

Embattled low-cost carrier Norwegian Air Shuttle, which recently filed for bankruptcy protection in Ireland, said Tuesday it had launched a similar process in Norway.

Norwegian Air to seek bankruptcy protection in Norway
Passengers board a Norwegian Air plane in Kirkenes, Norway October 26th 2019. Photo: Gwladys Fouche/Reuters/Ritzau Scanpix

Burdened with massive debt after an ambitious expansion programme and suffering from the Covid-19 pandemic that has paralysed global air traffic, Europe's third-biggest no-frills airline is now fighting for its survival.

An Irish court on Monday allowed Norwegian to put itself and several Irish subsidiaries — which manage its fleet and some of its routes in Europe — under “examinership”, the equivalent of the US procedure known as Chapter 11, to shield itself from creditors.

“A supplementary reconstruction process under Norwegian law will be to the benefit of all parties and will increase the likelihood of a successful result,” Norwegian chief executive Jacob Schram said in a statement.

“Our aim is to secure jobs in the company and to contribute to securing critical infrastructure and value creation in Norway,” he added.

Pending a worldwide roll-out of Covid vaccines that could enable air traffic to return to normal, Norwegian last week presented a rescue plan that included slashing its fleet, debt conversion and a rights issue of up to four billion kroner (374.5 million euros).

Shareholders are due to vote on the plan at an extraordinary general meeting on December 17th.

The company, a pioneer in the low-cost long haul sector, has been in the red since 2017 and its debt amounted to 48.5 billion kroner at the end of September.

Just six of the 140 aircraft it had in service at the start of the year are still flying, on Norwegian domestic routes, while only 600 employees among a formerly 10,000-strong payroll are still at work.

READ ALSO: Oslo refuses new Norwegian Air bailout

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