Discount carrier Norwegian Air faces collapse by year’s end, Grant Martin wrote in a article published on Forbes.com. According to several Norwegian news sources, the carrier faces a mountain of debt payments that are due by the end of the month. “And with weakened revenue, those bills may be hard to pay,” Martin writes.
Newspaper Dagens Næringsliv (DN) reported on Thursday that Norwegian Air’s parent company is facing “full crisis” in 11 days if it fails to acquire fresh capital to satisfy lenders. Norwegian is saddled with heavy debt because of its aircraft acquisitions to serve its massive route expansion in recent years. The same day, Newsinenglish.no said that “Analyst Martin Stenshall at Danske Bank thinks Norwegian will violate the terms of its loans by New Year.” A news item that was later picked up by other news sites.
In a response to Aviation24.be, Norwegian Air spokesman Philip Allport strongly denied this weekend’s news and talked about pure speculation: “Our liquidity is satisfactory, we attract hundreds of thousands of new passengers every month and we are currently working on selling parts of our fleet, which will further strengthen our financial situation.”
Have your say in our Norwegian in 2018 forum topic.
https://viewfromthewing.boardingarea.com/2018/12/21/could-norwegin-air-be-days-away-from-collapse/
On 24 December, Norwegian Air Shuttle ASA published the statement hereunder:
Norwegian Air Shuttle ASA (“the Company”) would like to give the financial market a year-end update. To meet the competitive environment in a period with seasonally lower demand in Europe, the Company has made several changes to its route portfolio as well as adjusted its capacity. Combined, these measures should improve the financial performance from the start of 2019.
In addition, the Company has launched an extensive cost savings program, #Focus2019, which will contribute to estimated savings of minimum NOK 2 billion in 2019. Six weeks into the program, we have already identified significant savings. The Company will update the market with results from #Focus2019 in connection with the announcement of the results for the first quarter of 2019.
As previously communicated, Norwegian’s long-haul operation has been disrupted by challenges with the Rolls-Royce engines on the Dreamliners. The Company has now reached an agreement with Rolls-Royce which will have a positive effect from the first quarter of 2019. The commercial terms of the agreement remain confidential.
The Company is pleased to announce that the financing for all aircraft deliveries for the first half of 2019 is secured. This also includes refinancing of one of the delivered Dreamliners, resulting in a positive liquidity effect of NOK 275 million in December 2018.
The process of divesting aircraft continues, and we experience significant interest in our existing fleet as well as future deliveries. The Company recently signed a letter of intent for the sale of two aircraft with delivery in the first quarter of 2019. The discussions about forming a joint venture for aircraft ownership also continues with full force.
This post was published on 23 December 2018 17:58
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