Norwegian Air calls for protection of the law

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The budget carrier said in a statement Wednesday that it has decided to file a review request in Ireland, where its aircraft assets are held. The exam allows businesses to seek court creditor protection for up to 100 days, and is the rough equivalent of Chapter 11 bankruptcy in the United States.

“The goal of the process is to reduce debt, resize the fleet and secure new capital,” Norwegian Air said. The process is expected to take up to five months, he added.

“Seeking protection to reorganize under Irish law is a decision we have taken to secure Norwegian’s future for the benefit of our employees, customers and investors,” said CEO Jacob Schram. “Our goal is to find solutions with our stakeholders that will allow us to emerge as a financially stronger and safer airline.

Norwegian Air was founded in 1993 and began rapid expansion almost ten years ago, seeking to apply the business model developed by Ryanair in Europe and the Southwestern United States to transatlantic flights. But the aggressive strategy left him with huge debts and little wiggle room in the event of a problem.

Norwegian Air said on Wednesday that it will continue to operate its network of roads, which has been severely limited due to the coronavirus, and its shares will normally trade on the Oslo Stock Exchange. The title has lost over 98% of its value this year.

The carrier warned last week that it would need additional cash to continue operating into the first quarter of next year and beyond. He received a state-backed loan of 3 billion Norwegian kroner ($ 288.7 million) in May, but the country’s government has ruled out providing additional financial assistance – a move Schram called a “slap in the face.” “.

The airline carried just 1 million passengers in the third quarter, up from 10.5 million in the same period last year. Its quarterly operating loss was 2.8 billion crowns ($ 310 million), while cash and cash equivalents declined to just 3.4 billion crowns ($ 376 million) at the end of September.

– Charles Riley contributed to this report.

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