Norwegian Air to run out of cash within months
Embattled Norwegian Air this morning warned that it could run out of cash in the first quarter of 2021, unless it manages to find a fresh source of financing.
Reporting its third quarter results, the low-cost carrier said: “Norwegian is dependent on additional working capital in order to continue operating through the first quarter of 2021 and beyond.”
Shares dived 15 per cent on the announcement, which was issued to Oslo’s stock exchange today.
The announcement comes just a day after it was revealed that Norway’s government would not provide the airline with additional funding.
As a result, Norwegian said that it would furlough 1,600 colleagues and park an additional 15 planes.
Having employed more than 10,000 people prior to the coronavirus pandemic, there will be just 600 people working for the carrier over the coming months.
Norwegian made a loss of 980m krone (£82m) in the third quarter, a fall of 91 per cent year on year.
It flew just 1m passengers over the three month period, just a tenth of the number it carried in the same period in 2019.
Chief executive Jacob Schram called on the government to provide extra support for the whole aviation sector ahead of the challenging winter period.
“It is crucial that the Norwegian aviation industry receive further support if we are going to survive and get through this unprecedented situation and emerge ready to support the economic recovery of the Nordics from 2021 onwards”, he said.
Back in May it was announced that the airline had received 2.7bn krone from officials as the first wave of the pandemic swept across the world, grounding flights and decimating passenger numbers.
With a second wave of cases surging in September, however, it was revealed that Norwegian was back in talks with ministers for new funding.
However, it emerged yesterday that the talks had been ended. Schram described the decision as a “slap in the face” for the airline.