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Norwegian Scandinavian Subsidiaries File for Bankruptcy
It’s no secret that over the past few years Norwegian has been standing on a very thin rope, accumulating losses, seeking additional cash injection and restructuring routes in order to stay afloat. As COVID-19 hardly hits the global aviation year as no event in the past century; Norwegian’s Danish and Swedish subsidiaries have filed for bankruptcy.
Jacob Schram, Norwegian’s Chief executive said: “We have done everything we can to avoid making this last resort decision and we have asked for access to government support in both Sweden and Denmark. Our pilots and cabin crew are the core of our business and they have done a fantastic job for many years. It is heart-breaking that our Swedish and Danish pilot and cabin crew subsidiaries now are forced to file for bankruptcy, and I’m truly sorry for the consequences this will have for our colleagues. We are working around the clock to get through this crisis and to return as a stronger Norwegian with the goal of bringing as many colleagues back in the air as possible.”
The Oslo-based carrier has laid off more than 4,000 pilots and cabin crew working in Denmark and Sweden after governments rejected the carrier’s pledge for support and salary protection. The airline’s operation in its home country of Norway is being maintained afloat, as there are furlough opportunities in which the Norwegian government covers employee salaries for the duration of the period, removing the pressures to burn very limited cash reserves.
The airline has also temporarily suspended pilots and cabin crew at its U.K., Finland and U.S bases as the airline continues to seek government support with its corresponding base-country authorities.
Meanwhile, contracts of employees in bases in France and Italy remain unaffected.
Norwegian’s international dimensionality provides an interesting optic that graphics how the multi-country base future outlook is dependent on individual government support of initiatives of the countries the airline bases operations at. A similar example is South American carrier LATAM, which has bases across seven South American countries including Brazil, Chile, Peru and Argentina, which is dependent on individual government responses.
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