Government rescue plan kicks in for Norwegian

(Photo: Norwegian)

Norwegian Air Shuttle (Norwegian) has announced that it is has qualified to receive funds from the national government’s rescue plan that was announced last week. The airline said that two Nordic banks have obtained credit committee approval to provide a guarantee for the required 10% for the first tranche of NOK 300 million. The airline said this will give it “the necessary headroom” to pursue further guarantees from the Norwegian Government.
On March 19, the Norwegian Government proposed a guarantee of NOK 6 billion for the Norwegian airline industry, of which up to NOK 3 billion is directed to Norwegian. The guarantee will be up to 90 percent from the Norwegian Government provided that financial institutions contribute with the remaining 10%. The guarantee scheme will consist of three tranches with a maximum two years maturity.

The airline is talking with the banks and the Norwegian Export Credit Guarantee Agency (GIEK), which will administrate the guarantee scheme, in order have the NOK 300 million available as soon as possible. It said is also working with GIEK and the Ministry of Trade, Industry and Fisheries to clarify the criteria and terms related to the remaining tranches under the scheme and to obtain further guarantees from financial institutions in order to back such remaining tranches.

Operational update
Currently, most of the fleet is grounded and the company has reduced its operations to a minimum. The carrier said it will now primarily operate domestically in Norway and Sweden and between the Nordic capitals, in order to deliver on its corporate responsibility of maintaining critical infrastructure so that people and necessary goods and medical supplies can be transported during this unprecedented crisis. The limited schedule will remain in place until further notice. In addition, Norwegian has conducted repatriation flights together with the authorities in order to get citizens of Norway, Denmark and Sweden back home.

In order to reduce its costs, Norwegian has temporarily laid off approximately 90% of its workforce and has said it will continue to implement additional cost measures going forward