Norwegian, which has been reconstructing its business in order to continue flying, announced its newest financial results. While there are positive signs for the company’s future, the low-cost carrier still warned of a potential collapse in the near future, as uncertainty lingers.
Norwegian indicated that during the restructuring process, its equity balance improved by NOK18.5 billion ($2.1 billion), of which NOK5.2 billion ($607 million) was recognized in the latest income statement. The airline has operated under an Irish examinership and reconstruction in Norway since November and December 2020, respectively.
The company highlighted that continuing operations relies on “a successful exit from these processes, with a significant reduction in the company’s fleet of aircraft,” reducing debt and raising new capital. The two processes are expected to conclude in Q2 2021. However, if the conclusion is not a positive one, “it is highly likely that the company will enter into liquidation and/or bankruptcy proceedings,” during the same quarter.
Norwegian aims to raise as much as between NOK4 and NOK5 billion ($466.2 million and $582.8 million) mainly via a share offering. In terms of its fleet, the airline plans to operate 53 Boeing 737 aircraft going forward with a focus on short-haul flights from the Nordic countries.
“The company is however optimistic that the examinership and reconstruction processes as well as that the capital raises and debt conversions will be successful,” was written in the company’s Q4 2020 financial report.
All in all, Norwegian ended 2020 with a net loss of NOK23 billion ($2.6 billion), as its operating revenue dropped by as much as 79% compared to a year prior. Most importantly, the company managed to reduce its debt by 31% and is now looking at a net interest-bearing debt of NOK40.2 billion ($4.6 billion). 12 months ago, the airline’s debt was NOK58.2 billion ($6.7 billion).
On average, Norwegian operated 15 aircraft throughout the last quarter of the year, carrying 574,000 passengers.
“Despite the difficulties the pandemic has caused, there is a great fighting spirit and engagement within the company, and together we will build new Norwegian when we exit the reconstruction processes,” commented on the company’s results Jacob Schram, the Chief Executive Officer (CEO) of Norwegian.
The beginning of 2021 brought further changes to the airline, as the low-cost carrier announced its decision to ax its signature long-haul operations on January 14, 2021.