Norwegian Air gets lifeline to prove it can make money

Norwegian Air’s third fundraising from investors in 20 months could be the airline’s final chance to prove it can make money from cheap transatlantic air travel, one of its major shareholders said on Wednesday. Shares in the airline fell around 10% after it raised 2.5b crowns ($272m) from a discounted sale of shares, as well as a convertible bond issue. It said the money would cover its needs “through 2020 and beyond based on the current business plan”. The move was the latest by acting CEO Geir Karlsen and Chairman Niels Smedegaard, both appointed earlier this year, to try to prevent Norwegian from joining the ranks of airlines that have collapsed due to industry overcapacity. Norwegian, which has also been hit by the grounding of Boeing’s 737 MAX jet, has raised 5.4b crowns from its shareholders since March 2018, including 1.3b last year and 4.1b this year, in addition to the new bond sale. Norwegian fund Sissener AS, which invested in Tuesday’s share issue and convertible bonds, said the additional funds had significantly improved Norwegian’s prospects, although it still needed to demonstrate it can generate cash. “They have to show they’re able to earn money. I don’t think the market will be as forgiving another time,” the fund’s founding partner Jan Petter Sissener told Reuters. <br/>