Budget airline Norwegian has sought bankruptcy protection (examinership) in Ireland, where its aircraft assets are held.
The carrier said: “The purpose of the process is to reduce debt, rightsize the fleet and secure new capital. This reorganisation process protects the assets of the Norwegian group while allowing the company to focus on the rightsizing of the group. The process is estimated to take up to five months.”
Norwegian will continue to operate its route network and trade on the Oslo Stock Exchange.
Jacob Schram, Norwegian chief executive, said: “Seeking protection to reorganise under Irish law is a decision that we have taken to secure the future of Norwegian for the benefit of our employees, customers and investors. Our aim is to find solutions with our stakeholders that will allow us to emerge as a financially stronger and secure airline.”
Trading of its shares on the Oslo stock exchange was suspended on Wednesday lunchtime ahead of the confirmation.
The carrier said in a stock exchange statement: “It is important to note that due to the Covid situation, several transportation companies have initiated variations of such examinership processes with a positive outcome for customers, employees, shareholders and other stakeholders.
“Norwegian is therefore confident that it too will successfully emerge as a stronger and leaner airline ready to meet renewed airline travel demand in 2021 after the Covid pandemic subsides.
“Based on Norwegian’s current cash position and the projections going forward, the Company believes it has sufficient liquidity to go through the above-mentioned process.”
Last week, the Norwegian government said it would give no further support to the embattled airline, which immediately cancelled all flights apart from 12 domestic services.
However, this week, the carrier detailed plans to relaunch seven transatlantic routes from Gatwick on 28 March next year, including 16 flights a week to New York.