Norwegian Air seeks $711 million in fresh capital

NORWAY: Europe’s best low-cost airline, Norwegian Air, is raising 6 billion crowns (about $711 million) to reconstruct its operations following the devastating impact of the COVID pandemic to the global travel industry.

“The capital raise has been revised to between 4.5 and 6 billion kroner, this is due to several factors. We want to take a conservative approach at a time when the pandemic and travel restrictions continue to create unpredictability in the travel sector. Therefore, we must take this uncertainty into account in our forward planning strategy. At the same time, we have also taken into consideration feedback from investors, as well as dialogue with our board,” said Jacob Schram, CEO of Norwegian.

“The new Norwegian, with a simplified organizational structure and operating model, will be a significantly more competitive company than before. This will not only be the case when compared to how we were before the pandemic struck, but also in view of the competitive environment we envisage across the aviation industry in the future,” Schram continued.

The fresh capital will enable the airline to reduce its debt and to cancel aircraft orders worth NOK 85 billion.

Norwegian CFO Geir Karlsen thanked investors for their support for the restructuring and capital raising move of the airline, saying, “The debt will be reduced by between NOK 62 and 65 billion compared to the end of 2019, and we have cancelled aircraft orders worth NOK 85 billion. Total debt will therefore be between NOK 16 and 20 billion, of which NOK 6-7 billion is related to our aircraft fleet.”

Norwegian’s passenger traffic figures remain weak with March 2021 indicating only 71,399 travelers served, down by 94% compared to March 2020.