Norwegian Air Declares Bankruptcy, Looks To Reorganize

Last month they were in talks to be nationalized. The Norwegian government decided not to extend a second bailout to the low cost carrier. And now Norwegian Air has filed for bankruptcy reorganization in Ireland, where its aircraft assets are held.

Norwegian was exceptionally weak before the pandemic, but their financial maneuverings had positioned them so that a strong summer would give them runway to make it through the lean winter. Covid precluded that strong summer. On March 6 I identified Norwegian’s failure as a coronavirus risk. Earlier they declared four subsidiaries bankrupt.

Following the government of Norway’s decision to withhold further support from the airline, and the ongoing COVID-19 pandemic, Norwegian Air Shuttle ASA has decided to initiate an examinership process in Ireland relating to its subsidiary Norwegian Air International Limited (NAI), its wholly-owned asset company Arctic Aviation Assets DAC (AAA) and some of AAA’s subsidiaries; Norwegian will also enter in and get protection of the Irish Examinership process as a related party.


Copyright william87 / 123RF Stock Photo

The airline expects a 5 month bankruptcy process. The business continues in its limited Covid state in the meantime. They believe they have the cash needed to see themselves through reorganization. Will they be able to attract additional exit financing, even if they manage to discharge some of their debts?

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Comments

  1. By far the best low-cost carrier. What a shame – will miss a lot about flying with them! As long as you knew what you were getting into, you could snag some wonderful fares to fun places (loved flying direct to Bergen!).

  2. I’m sorry to see them go. We have used them for return from Europe to the states and I thought their equivalent to 1st class was a great bang for the buck.

  3. Norwegian was a lousy airline with very poorly trained staff. I am glad to see them go. Think the chances of Norwegian surviving liquidation is low. Norwegian’s only claim to fame was primarily pricing gimmicks that could only be realized if the route was direct and without baggage.

    Lessons learned: Trying to be a pop up airline in the long haul market has not worked before, does not work today, and will not work in the future. How many more billions need to be wasted relearning this lesson is not clear.

  4. Norwegian is not dead yet. There are survival plans on the shelf and believe these are well constructed. The left personnel has full confidence in CEO Jacob Schram to restart operations end of march 2021.

  5. Sorry to hear, and hope they will return. I have been very pleased with their super low cost, direct flights to major European cities for many years. New Dreamliners are very roomy, staff very good. Never a problem. . Surprised Norway, the richest country on the planet, couldn’t bail out their flagship airline.

  6. So sorry about this.
    I hope they come back.
    We flew them from Europe to the States on what they called first class but was really more like business class, except the seats didn’t lay flat, but man oh man what a great price.
    The seats were basically the old business class seats that didn’t lay flat.
    They are my top choice for transatlantic travel do to price.
    British Airways Premium + is a sham. Not worth the money.

Leave a Reply

Your email address will not be published. Required fields are marked *