Norwegian Air slammed for dishing out bonuses weeks after court-ordered restructuring
Norwegian Air has been slammed by Norway’s industry minister today for dishing out bonuses to top management just weeks after emerging from court-ordered bankruptcy proceedings.
The budget airline emerged from a comprehensive restructuring process at the end of May, raising around $705m for it to exit bankruptcy protection.
“That shows poor judgment,” Norwegian trade and industry minister, Iselin Nyboe, said in a statement today.
“The board and chief executive Geir Karlsen have a big job ahead of them in explaining this and rebuilding the reputation of Norwegian.”
Karlsen, who was chief financial officer during the restructuring, was revealed as the new CEO last week.
The six-month restructuring process saw the airline shed thousands of jobs during the pandemic and forced creditors to swap billions of dollars in debt for stock.
To help save the budget carrier from collapse, the Norwegian government gave it around $350m in loan guarantees part way through 2020. The government also offered Norwegian a hybrid loan of around $175m.
However, it was reported last week that the airline had begun paying out bonuses of some $3.5m combined to managers, as a reward for saving the company.
Norwegian Air said the government pay-outs had been agreed as a retention bonus amid the financial restructuring to ensure key managers did not leave during the pandemic.
The company had not violated any government loan conditions, its lawyers said in a letter to the ministry.