Norway government says it will not give more support to Norwegian Air

In this news, we discuss the Norway government says it will not give more support to Norwegian Air.

OSLO (Reuters) – The Norwegian government will not provide additional financial support to Norwegian Air NORR.OL, which has been hit hard by the coronavirus pandemic, the Ministry of Industry and the Ministry of Transport said in a statement on Monday. .

Norwegian Air, which has grounded most of its fleet, said in August it would run out of cash in the first quarter of 2021 unless it could secure new funds and had talks with the government in the hope to get support.

“The fact that the government has decided to reject the request for the funds is disappointing and sounds like a punch to everyone at Norwegian,” Managing Director Jacob Schram said in a separate statement.

Creditors and lessors took control of the airline in May with a financial bailout that allowed it to access state-guaranteed loans of 3 billion Norwegian kroner ($ 329 million) and avoid thus a collapse.

“Norwegian Air has asked for billions of kroner in additional support, and the government has concluded that this will not be a responsible use of public funds,” Industry Minister Iselin Nyboe said.

The airline industry is likely to provide sufficient services and will still experience healthy competition in the years to come, she said.

The Scandinavian carrier SAS SAS.ST is a major competitor in Norway, and the Hungarian Wizz Air WIZZ.L recently launched several domestic routes.

“Norwegian is currently assessing the effects of the current situation with the aim of protecting the interests of all stakeholders,” the company said.

The company said more funding could come from the sale of planes, converting more debt into equity or from its owners and the Norwegian government, while declining to say how much it might seek.

Norwegian Air will hold a press conference at 9:30 a.m. GMT, the company said.

($ 1 = 9.1185 Norwegian crowns)

Reporting by Terje Solsvik; edited by Richard Pullin and David Goodman

Original © Thomson Reuters

Originally posted 2020-11-09 00:36:10.

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