Copenhagen, Nov. 19, (dpa/GNA) – Heavily indebted Norway-based budget airline Norwegian Air on Wednesday said it had applied for bankruptcy protection for subsidiaries in Ireland that will pave the way for restructuring.
The move relates to the Irish-based Norwegian subsidiaries Norwegian Air International Limited and Arctic Aviation Assets DAC and some of the subsidiaries of Arctic Aviation Assets DAC.
It follows the decision of the Norwegian government not to give any further financial support to the group, which has suffered heavy losses during the coronavirus pandemic.
Under the Irish examinership process, failing companies receive bankruptcy protection for a period of time. In this way, the business can continue to operate under supervision, allowing for restructuring.
“The purpose of the process is to reduce debt, rightsize the fleet and secure new capital,” Norwegian said in a statement.
“This reorganisation process protects the assets of the Norwegian group while allowing the company to focus on the rightsizing of the group,” it added.
“Our aim is to find solutions with our stakeholders that will allow us to emerge as a financially stronger and secure airline,” Chief Executive Jacob Schram said.
The move comes the week after Norwegian posted a third quarter net loss of 980 million kroner (108 million dollars) as the coronavirus pandemic caused a sharp drop in demand for air travel.
Revenue slumped in the July to September period by more than 90 per cent year-on-year to 1.28 billion kroner.
Norwegian said it flew almost 1 million passengers in the third quarter, a drop of 91 per cent year-on-year, and operated only 25 aircraft out of its 140-strong fleet.
GNA