Norwegian in crisis as state denies ‘rescue’

Bloomberg

Norwegian Air Shuttle ASA risks becoming a casualty of the global aviation crisis after the state rejected a request for a second multi-billion krone rescue package.
A fresh bailout wouldn’t be a good use of public funds, the government in Oslo
said, leaving the discount carrier in need of help to weather the winter months as air travel remains deeply disrupted by the Covid-19 pandemic. The airline will have “to turn over every stone” in searching for ways to outlast the downturn, CEO Jacob Schram told reporters.
Norwegian is one of many airlines globally to face an uncertain future without additional support, either from governments or shareholders. An expected pickup in
air travel over the summer barely materialised, as a resurgence in coronavirus infections prompted states to impose additional test and quarantine measures, or to ban leisure travel altogether.
“The bankruptcy risk for Norwegian Air Shuttle has
increased significantly” following the government’s decision to withhold further aid, DNB ASA analyst Ole Martin Westgaard said. “We see a low likelihood of the company being able to attract external funding in a market where most airlines have been dependent upon significant government support to survive.”
Norwegian was struggling even before the pandemic, and was forced to ground virtually its entire fleet and
furlough or fire 8,000 employees, representing 80% of its workforce. The company accessed a state loan worth
3 billion kroner ($330 million) in May, but was forced to hand over almost all equity to creditors as a result.