Norwegian Air loss deepens after carrier clings on
Norwegian Air today reported that it made a loss of 3.3bn Norwegian krone (£270m) in the first quarter after the low-cost carrier narrowly avoided going out of business due to the coronavirus pandemic.
The loss for the period was 66 per cent deeper than that reported in the same quarter last year, when the airline posted a 2bn krone loss.
As a result of the pandemic, the airline said it had been forced into “hibernation mode”, grounding aircraft and laying off 90 per cent of its staff.
In a statement, Norwegian said: “The company is currently in hibernation mode and at the same time is conducting significant restructuring of the organization, including establishing a new strategy and updated business plans”.
Earlier this month the airline’s bondholders agreed a $1bn (£800m) rescue plan, paving the way for the carrier to access a further £270m in government cash.
Its Danish and Swedish subsidiaries, however, filed for bankruptcy last month, Norwegian confirmed today.
Before the crisis, the airline had been targeting regaining profitability after three years of losses, but the spread of the pandemic put paid to that.
Norwegian, which was one of the pioneers of the low-cost transatlantic airline market, had swiftly gained sizeable market share, but incurred a hefty debt pile as a result.
Last month it warned that the majority of its fleets could remain grounded until April 2021 depending on international travel advice.
According to a plan shared before the crunch bailout vote, Norwegian is aiming to ramp up services towards a normal level in 2022.
The timeframe puts it behind rival carriers such as Ryanair, Easyjet and SAS, who are preparing to increase services in the coming weeks.