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Norwegian to keep most flights grounded until next spring
Low-cost Norwegian Air is planning to keep most of its flights grounded until next spring, after which it plans to start ramping up its services for the peak summer season.
However, in a presentation to bondholders on Thursday it will warn that it isn’t expecting flights to get back to normal until 2022.
As a result, the airline needs to secure a NOK 2.7 billion loan from the Norwegian government within the next three weeks to ensure it can survive until the end of this year.
It has already received NOK 300 million, but it says it needs to restructure its debt to increase its capital to release the remainder of the NOK three billion (£230 million) government loan.
If it succeeds, it said the money should tide it over until the end of the year, but it warned that it might need further funding.
Currently, 95% of the Norwegian’s aircraft are grounded and thousands of workers are furloughed.
As part of the new business plan, the carrier plans to only operate seven aircraft in the Scandinavian region until April 2021 to minimize its cash burn, and then gradually resume long-haul and European flights.
Even by 2022, it expects to operate a maximum of 120 aircraft compared with 168 prior to the pandemic, focusing only on profitable routes.
It is proposing a debt restructuring plan that will give aircraft leasing companies that are owed more than $3 billion more than half the equity in the airline, while bondholders would control the second largest share.
The proposal would leave existing owners of the stock with just 5.2% of the airline. Bondholders are scheduled to vote on the proposals on Thursday before a shareholder meeting set for May 4.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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