Norwegian Air hopes you won’t pay by credit card

For air passengers, the nice thing about booking a ticket with your credit card is knowing you can probably get your money back if the carrier goes bust before you travel. For cash-strapped airlines, the arrangement has a downside. If card providers are worried about a particular carrier’s finances, they can withhold more money on ticket sales from the company, potentially making its liquidity problem worse. These so-called “credit card hold-backs” contributed to Flybe’s cash troubles earlier this year, as well as Frontier Airlines’ Chapter 11 filing a decade ago. They’ve been a big headache too for Norwegian Air Shuttle. Norwegian was forced to raise US$350m in capital in February to head off a liquidity and capital crunch that was made worse by cautious credit card companies. <br/>