The budget carrier is currently seeking to restructure its debt to raise enough cash to unlock the maximum NOK 3 billion (£230 million) that has been available by the Norwegian state.
However, ahead of an extraordinary general meeting fixed for 4 May, where the carrier will seek permission from stakeholders to convert sufficient debt to equity to meet the requirements of the Norwegian government, Norwegian has warned anew of the very immediate challenges it faces.
"Norwegian needs to access the Norwegian state aid package of in total NOK 3 billion by mid-May to manage the significant challenges of the current Covid-19 environment and prepare to gradually reopen its route network and bring back furloughed employees," said the carrier in a presentation to bondholders issued on Monday (27 April).
"The NOK 3 billion is assumed to be sufficient to cover the liquidity need until year-end, however, given the high degree of uncertainty on the current market situation, subsequently the exact liquidity need, including size and timing, there could be need for additional funds to have sufficient liquidity runway until operations normalise."
Norwegian said it was "well on track" with its plan to transition from growth to profitability when the Covid-19 crisis took hold, forcing Norwegian to pull 85% of scheduled flights by mid-March; 95% of its fleet is now grounded, while 7,650 Norwegian employees have been furloughed – approximately 80% of its workforce.
The carrier’s pilot and cabin crew subsidiaries in Sweden and Denmark have been folded to reduce costs, while agreements covering 1,571 pilots and 3,134 cabin crew have also been cancelled. In total, just 200 Norwegian staff remain engaged in operations.
Norwegian said the state aid it is seeking will cover its "immediate liquidity needs". "[It is] critical to get access to the state aid package by mid-May before the company runs out of cash," said the carrier in its presentation.
It is preparing now to place its fleet into "hibernation" for the low season to focus on cash preservation ahead of a "planned recovery" during the 2021 high season before its operations can return to normal in 2022.
The carrier has previously stated work is already ongoing to build a "New Norwegian" with a focus on "core profitability" and an "aggressive cost focus".
Norwegian plans to return with a smaller fleet; an optimised route network; a more agile and flexible cost base with regards to crew and operation; flexible pricing and bundles; and a stronger financial footing.
New Norwegian’s fleet is forecast to run to 110 to 120 aircraft, although the plan for its fleet will depend on the post-Covid-19 landscape, with a strong focus on "route profitability".
