The embattled low-cost airline Norwegian says the announcement of a taxpayer-funded bailout by the Norwegian government is “very positive” and that it is “grateful” for the package that has been put on the table. The package, unveiled earlier this evening, totals NOK 6 billion ( $528 million), of which Norwegian will be able to claim up to NOK 3 billion.
Earlier this week, Norwegian chief executive Jacob Schram said the airline was facing a “critical phase” brought about by the Coronavirus pandemic. Schram had urged the Norwegian government to move swiftly or face the prospect of the loss-making airline going bankrupt.
The COVID-19 crisis has prompted Norwegian to cancel at least 85 per cent of its flight schedule with the airline saying that at one point the situation was “escalating by the hour”. The airline has grounded the vast majority of its fleet and temporarily laid off 7,300 employees (around 90 per cent of its workforce) in order to save costs.
Under conditions imposed by the government, Norwegian must implement measures to obtain security for all of the money. In a statement released this evening, Schram said they would “have to spend some time to familiarize ourselves with the conditions”.
“But we can guarantee that we will do everything in our power to meet the requirements,” he continued.
Norwegian will immediately get a bailout worth $26 million but won’t receive an additional $105 million until it has obtained relief in interest and repayments from creditors. The final $131 million won’t be paid out until Norwegian has managed to improve its equity.
Scandinavian carrier SAS will also get a bailout of around $130 million.
