An Irish Court has approved the restructuring plan that will see low-cost carrier Norwegian Air Shuttle attempt to emerge from bankruptcy protection.
The carrier had filed for bankruptcy protection in Ireland in November 2020 after it had been forced to drastically reduce its schedule and fleet due to the COVID-19 pandemic. At that stage only 600 of the original 11,000 employees were still actively working and only six aircraft remained operational of the 160-strong fleet that was flying across Europe, Asia and North American before the crisis.
The plan will se the carrier cut down the number of aircraft to just 53, with 2,000 positions permanently eliminated in the process.
“We can now go forward with the reconstruction in Norway and initiate a capital raise.” Chief Executive Jacob Schram said in a statement following the ruling. However, the airline still needs to raise at least 4.5 billion Norwegian crowns (£380 million) to reduce its debt after the Norwegian government has confirmed it will contribute to the rescue of the carrier with 1.5 billion Norwegian crowns (£127 million). The Court has established the airline needs to cut its debt position to 20 billion Norwegian crowns from the current 56 billion.
“This is a demanding and ongoing process – continued the CEO Schram – however, the result of the court rulings today enforces our beliefs of a positive final outcome. We are looking forward to and are preparing for a post-pandemic world, without travel restrictions and open borders.”
Norwegian Air now needs to clear the next step represented by the Norwegian court that needs to ratify the decision of its Irish counterpart, and after that there needs to be an authorization from the Norwegian financial regulator to proceed with a new share issue. The legal steps in Norway should be completed by 9 April and, once funding is secured, the airline is expected to exit bankruptcy protection on 26 May, Canadian newspaper National Post reports.