Norwegian Air warns bailout will not be enough

Norwegian Air Shuttle warned it needed another rescue package only months after the low-cost airline secured a massive debt-for-equity swap backed by Norway’s government. Europe’s third-largest low-cost airline on Friday said it had cut its pre-tax losses by half in Q2 compared with the first three months of 2020. But CE Jacob Schram cautioned that a NKr3b ($340m) loan guarantee from Norway’s government, unlocked by a NKr15bn debt-for-equity swap involving aircraft leasing companies and the carrier’s bondholders, was unlikely to be sufficient. “Given the current market conditions it is not enough to get through this prolonged crisis,” he said Friday. Norwegian’s passenger numbers collapsed by 99% in Q2. Its hopes of demand recovering over the summer have been hit by Norway’s government reimposing quarantine requirements on travellers from countries such as Germany, Spain, the UK and France. Governments worldwide are propping up airlines, but Norway’s was initially reluctant to do the same with Norwegian as it entered the crisis with one of the highest debt loads of any airline due to ill-fated expansion plans in recent years, particularly into low-cost, long-haul travel. The airline warned on Friday that it needed additional working capital by the start of 2021 to remain solvent and suggested it could be achieved through a fresh capital increase, selling or refinancing assets, or fresh loans.<br/>