Norway’s government is too risky to join the airline. Norwegian Air faces an uncertain future.
At the beginning of October, the state’s participation in Norwegian was still up for discussion. Even the temporary nationalization of the airline was considered. But the government decided otherwise. She does not provide the airline with any further financial aid.
“We are responsible for the responsible use of public money,” said Industry Minister Iselin Nyboe on Monday (November 9th). “Norwegian Air has a financial structure that makes it risky for us to get on with support.” Norwegian boss Jacob Schram commented: “The fact that our government has decided not to provide any further financial support is very disappointing and feels like a slap in the face.”
Norwegian faces an uncertain future
Competitors in other countries would receive billions in funding from their respective governments, according to Schram. He had previously stated that Norwegian needed further financial aid to keep operations going during the Covid-19 pandemic. Now we are “facing an uncertain future”, but will “do everything in our power to overcome the crisis”.
Norwegian says it has 2,300 employees in Norway and several thousand abroad. However, the tourists who are brought into the country would secure the employment of 24,000 people and boost the local economy, so Schram. In addition: “The local travel industry and local companies have repeatedly emphasized the importance of the Norwegian route network.”
State secures loans
Norwegian was already struggling with high debts before the start of the Corona crisis, but initiated a change of course from growth to profitability in 2018. Schram said now that you can see the results of “our hard work” and actually expected the best summer in the history of the airline.
In May, the low-cost airline’s creditors agreed to a reorganization, clearing the way for state-secured loans amounting to the equivalent of more than 260 million euros.
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