Norwegian enters bankruptcy: what will happen in Spain

The airline low cost Norwegian Air Shuttle entered bankruptcy last week in its home country after several months at risk of bankruptcy, as explained it’s a statement referred to the Oslo Stock Exchange. He had already followed the same steps in Ireland and in both cases the courts have approved these requests, a step to try to get out of his situation, caused by the coronavirus pandemic.

In this way, the airline achieves certain special protection granted by the legislation with which it can face the restructuring necessary to solve its financial problems.

“Our objective is secure jobs in the company and contribute to ensuring, in Norway, the most critical infrastructure and value creation “, has explained Norwegian CEO Jacob Schram. Likewise, the company has remarked that the process seeks to “strengthen” the result it has achieved in Ireland and to “resize” its balance sheet, as well as that it seeks to reduce its debt.

“From now on we will focus on working towards our goal of reduce company debt as well as the size of our fleet aircraft and make sure we are a company that investors find attractive. We will be ready to compete for customers once the COVID-19 pandemic is behind us. “

“We will be ready to compete for customers once the COVID-19 pandemic is behind us,” Schram added. Europa Press.

Norwegian assures that it will continue to operate normally, but its crew and pilots in Spain have not worked since March

The same agency collects that Norwegian has guaranteed that it will continue to operate its routes as normal and that its bonds and shares will continue to trade on the Oslo Stock Exchange.

However, the company’s “new normal” is very different from the old one. At present none of the 1,285 Norwegian cabin crew and pilots in Spain are working. They have not done so since March, when they entered an ERTE that right now is expected to last until January 21, according to sources from the USO union have pointed out. Business Insider España.

In September it already announced the loss of almost 600 million euros, the suspension of 1,600 jobs and the reduction of its routes.

The current question in Spain is what will happen to the airline staff here, as well as the routes it operated, and with their planes. At the moment, 134 of its 140 aircraft are out of use, that is, Norwegian is only flying with 6 of them, and it only does so in Norway.

This is also seen on the aircraft traffic website Flightradar, which shows only a few routes planned by the airline for the next few days, all in Norway or Denmark.

“They do not tell us if they are going to stop operating here or if not, if a part or none will continue, or if half of the workforce will remain and in that case who will …”, point out union sources. The company Right now it has bases in the United States, Norway, Sweden, Denmark, Finland, Italy, France and Spain.

The same sources also emphasize that Norwegian is renegotiating the contracts of leasing of their planes, as well as thinking of selling some or renegotiating others, which could lead to the suppression of routes. If for example the company decides dispense with your 787, planes that are used for long-haul flights, Norwegian would cease to fly to the US and therefore to be a long-haul company.

In any case, it seems that the near future of the Spanish workers and the company in Spain will depend on these meetings and the procedures in Ireland and Norway.

The airline has convened an extraordinary meeting that will take place this Thursday to seek the support of shareholders for its plan to obtain 375 million euros with a program for converting debt into shares and issuing new securities. For the moment, he thinks that he can reach an agreement with his creditors and that “the conditions to open a reconstruction process are fulfilled,” according to a fail that protects the company from a possible bankruptcy.

The airline asked the Norwegian government for help but was denied

Norwegian had already requested financial assistance from the Norwegian Government, once again, which was denied. The company announced a few weeks ago that it would run out of cash in early 2021, unless it succeeds in securing new funds.

“Norwegian depends on additional capital to continue operating until the first quarter of 2021 and beyond,” he warned in his presentation of results until September.

The airline had cash and equivalents on its balance sheet of 319.6 million euros at the end of September. He said this just days after the Norwegian government communicated that it had no intention of offering him further financial support.

Then, a few weeks ago, the airline presented a restructuring plan to resist the bankruptcy that made it go public. Total, has fallen more than 99% so far this year, according Expansion.

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Further, in May I had already avoided bankruptcy by obtaining the support of creditors and shareholders for a plan to convert 1,163 million euros of debt into shares, as published The country. The plan allowed him to access state aid of 275 million euros, half of the total of a package to the Norwegian airline sector.

The company was already going through a difficult financial situation for years, which had been aggravated by the flight ban of the Boeing 737 MAX and other problems, such as those of the Rolls Royce engines, which has finished propping up the pandemic.

On the other hand, it is important to note that Norwegian Cruise Line Holdings does not belong to the same holding company as the airline, Although it has also been affected by COVID-19 and has made headlines in recent days.

The company ad at the beginning of December that extends the suspension of its trips due to the coronavirus pandemic, which affects its Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands and all trips with embarkation between January 1 and February 28 of 2021, and some of March, plus all those of Oceania and Regente between January and March.

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