Norwegian Air warns it may not survive into 2021 without new cash

Norwegian Air warned that it may not survive beyond the new year unless it received a new cash injection.

The low-cost carrier on Tuesday swung to a heavy third quarter loss as coronavirus travel restrictions saw passenger numbers plummet by 91%. It renewed a plea made on Monday for fresh capital after the Norwegian government refused a further bailout.

Debt-laden Norwegian said it was “dependent on additional working capital in order to continue operating through the first quarter of 2021 and beyond”.

It was forced on Monday to announce that a further 1,600 staff would be placed on furlough, leaving only 600 people still working out of a 10,000-strong workforce before the pandemic struck.

Third-quarter operating losses came in at 2.8bn crowns (£234m), down from a NOK 3bn crown profit in the same period last year, with overall debt and liabilities of NOK 66.8bn.

The company held cash and cash equivalents of NOK 3.4bn at the end of September, down from NOK 4.98bn three months earlier.

Chief executive Jacob Schram said changing government travel advice and further restrictions as a result of a second wave of infections seen in many countries had “further contributed to a decrease in customer confidence and certain routes becoming once again unviable leading us to rapidly adapt our network”.

Norwegian, which moved heavily into the discounted transatlantic market, now finds itself with heavy debts and is currently only serving domestic routes, with six of its 140 aircraft flying.

It is looking for new funds either from debt refinancing, a sale of aircraft and other assets or a conversion of debt to equity or from its owners.