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Norwegian’s survival battle as airline says cash support ‘not enough’
Norwegian has reported a loss of NOK 5.3 billion (£424m) in the first half of 2020 and warned it needs more financial support to survive the Covid crisis.
Passenger numbers tumbled 71% compared to the same period last year, with the carrier conceding it faces ‘challenging times ahead’.
Without a bail out it will struggle to survive the pandemic, Chief Executive Jacob Schram said.
As the Covid crisis deepened, the company received a Norwegian government loan guarantee of NOK 3 billion and an additional NOK 0.3 billion from commercial banks.
But Schram said the airline needed additional funds to get through the crisis.
"The COVID-19 crisis has impacted aviation and the travel industry particularly hard, and most companies need government support to survive," he said. "We see that many of our main competitors receive considerable liquidity support from their governments as aviation represents the backbone of infrastructure.
"We are thankful for the loan guarantee made available to us by the Norwegian government which we worked hard to obtain. However, given the current market conditions it is not enough to get through this prolonged crisis."
Following the collapse in customer demand Norwegian grounded 140 aircraft and furloughed or laid off 8,000 staff.
So dramatic was the decline that during the second quarter, the airline only operated seven or eight aircraft on domestic Norwegian routes.
"When we entered 2020, we were expecting a positive result and the best summer ever, thanks to successful cost-saving initiatives and a more efficient operation," Schram said.
"Then we were hit by COVID-19 and customer demand literally stopped from one day to the next, as government-imposed travel restrictions and travel advice were introduced world-wide."
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