This is how Norwegian can avoid bankruptcy

Norwegian announces on Wednesday afternoon that they are applying for bankruptcy protection for their subsidiaries Norwegian Air International and Arctic Aviation Assets in Ireland.

– As a result of the Norwegian government’s refusal to support the airline in the ongoing pandemic, Norwegian has decided to initiate a reorganization process in Ireland, the company writes in a press release.

Norwegian will continue to fly its fixed routes and the share will be traded as normal on the Oslo Stock Exchange.

– We have made the decision to apply for protection to reorganize under Irish law to secure Norwegian’s future, so that it benefits our employees, customers and investors, says CEO Jacob Schram in a press release.

– Stronger airlines

The announcement came after the Oslo Stock Exchange stopped trading in the Norwegian share pending an announcement from the company.

– Our goal is to find solutions in collaboration with our stakeholders that enable us to come through this as a financially stronger and more robust airline, he continues.

Aircraft analyst at Winair, Hans Jørgen Elnæs, explains to TV 2 that what Norwegian is doing now is that they are exposing themselves to NOK 22 billion in loans through the 36 subsidiaries that together own 44 Boeing 737 aircraft that we know from domestic flights in Norway, as well as 11 Dreamliners used for long distances.

750 million per aircraft

– Now they will try to adjust the agreements with those who have financed the planes to get a lower debt ratio. They depend on it to reduce the debt, which today is 48.4 billion, significantly down so that they can be included in a proper aviation package that can come from the government in January, perhaps sooner, says Elnæs.

– Erna Solberg stated that Norwegian must clean their own house, is this what they are doing now?

– We will see that Norwegian makes these moves, and we will see that the leasing companies make their moves, in that the world’s largest leasing company AirCap, which has eleven large dreamliners leased to Norwegian, can take these back, he says.

These aircraft have a value of 750 million each, and will help to reduce Norwegian’s debt considerably.

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