BUSINESS NEWS


A Norwegian Air prospectus for investors warns: ‘Even if the company should conclude the restructuring, there is a significant risk [it] becomes insolvent and enters bankruptcy’


Norwegian axes long-haul but survival doubts persist


Carrier to close Gatwick base and seeks debt-for-equity swap, reports Ian Taylor


Norwegian Air announced the end of its long-haul operations and closure of its Gatwick base last week as it attempts to exit insolvency protection by March with a second debt-for-equity swap in nine months. But aviation analysts cast doubt on


the airline’s ability to survive even if it pulls off the latest recapitalisation. Norwegian’s previous shareholders


were wiped out by a £1 billion debt- for-equity swap last May which left them holding 5% of the airline. Now chief executive Jacob Schram proposes doing the same to the current


56 21 JANUARY 2021


shareholders, leaving them just 5% of equity and creditors another 25% while seeking investors to purchase the remaining 70%. The carrier also hopes to persuade


the Norwegian government to provide funds. The government provided the airline with NOK3 billion (£240 million) last May, but turned down a further request for aid, declaring the carrier “a significant risk”. Schram described the plan to


focus on Norwegian’s “core Nordics business” as “robust”, saying: “We do not expect customer demand in


the long-haul sector to recover in the near future.” However, Bernstein Research


managing director and senior analyst Daniel Roeska noted Norwegian was forced to restructure even before the pandemic and said: “A significant risk of bankruptcy remains.” Speaking on a Capa Centre for


Aviation webinar, Roeska said: “Norwegian is barely flying and converting as much debt as it can to


Continued on page 54 travelweekly.co.uk


BUSINESSNEWS


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60