Norwegian Air posts $1.5 billion impairment loss as seeks fresh start

OSLO (Reuters) – Norwegian Air said on Friday it had booked an impairment loss of 12.8 billion Norwegian crowns ($1.5 billion) in the fourth quarter from its plans to cut its fleet of owned and leased aircraft and cancel aircraft orders.

FILE PHOTO: Norwegian Air Sweden Boeing 737-800 plane SE-RRY approaches Riga International Airport in Riga, Latvia January 17, 2020. REUTERS/Ints Kalnins/File Photo

Late last year the budget airline received protection from bankruptcy in both Norway and Ireland, where most of its assets are registered, and aims to survive the process with fewer aircraft and less debt.

“We are doing everything we can to emerge as a more financially secure and competitive airline with an improved customer offering,” Chief Executive Jacob Schram said.

“As soon as Europe begins to reopen, we will be ready to welcome more customers on board.”

The company said its reconstruction process in Norway and examinership process in Ireland, by which it aims to get rid of 78 aircraft, were progressing as planned and expected to end during the second quarter.

The company has warned it risks running out of cash by the end of March if it fails to restructure its debt and liabilities.

The company said it will present a detailed plan for its future during the course of next week and is preparing for a careful ramp up from the 10 aircraft currently in operation, depending on demand and travel restrictions.

Norwegian has already said it will end its long-haul service and focus on the Nordic and European network.

Its total liabilities had declined to 56.2 billion Norwegian crowns by the end of December, from 66.8 billion on September 30, and interest-bearing debt shrunk by 8.3 billion to 40.2 billion in those three months.

It hopes to cut debt to about 20 billion crowns and raise 4 billion to 5 billion from new shares and hybrid capital, with Norway’s government already agreeing to back it with 1.5 billion.

Norwegian, which is negotiating terms with lessors so as to cut its fleet to 53 aircraft from 140 earlier, said its fleet had shrunk to 131 by the end of 2020. ($1=8.5399 Norwegian crowns)

Source: Read Full Article