Norway government says it will not give more support to Norwegian Air

"That the government has decided to reject the request for funds is disappointing and feels like a punch in the gut for everyone at Norwegian," Chief Executive Jacob Schram said in a separate statement. Creditors and lessors took control of the airline in May with a financial rescue that allowed it to access state-guaranteed loans of 3 billion Norwegian crowns ($329 million) and thus prevent a collapse.

Reuters | Updated: 09-11-2020 12:54 IST | Created: 09-11-2020 12:40 IST
Norway government says it will not give more support to Norwegian Air
Representative image Image Credit: ANI

The Norwegian government will not provide additional financial support for Norwegian Air , which has been hit hard by the coronavirus pandemic, the Industry Ministry and the Ministry of Transportation said in a statement on Monday.

Norwegian Air, which has grounded most of its fleet, said in August it would run out of cash in the first quarter of 2021 unless it could secure fresh funds and has held talks with the government in the hope of winning support. "That the government has decided to reject the request for funds is disappointing and feels like a punch in the gut for everyone at Norwegian," Chief Executive Jacob Schram said in a separate statement.

Creditors and lessors took control of the airline in May with a financial rescue that allowed it to access state-guaranteed loans of 3 billion Norwegian crowns ($329 million) and thus prevent a collapse. "Norwegian Air has asked for billions of crowns in additional support, and the government has concluded that this would not be a responsible use of public funds," said Industry Minister Iselin Nyboe.

The airline industry is likely to provide sufficient services and will still see healthy competition in the time ahead, she said. Scandinavian carrier SAS is a major competitor in Norway, and Hungary's Wizz Air recently launched several domestic routes.

"Norwegian is currently evaluating the effects of the current situation with the aim of safeguarding the interest of all stakeholders," the company said. The company has said that more funding could come from the sale of aircraft, conversion of more debt to equity or from its owners and the Norwegian government, while declining to specify the amount it might seek.

Norwegian Air will hold a news conference at 0930 GMT, the company said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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