Friday 12/4/20
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Oslo refuses to approve additional financial support for Norwegian

The decision is "a slap in the face," the CEO of Norwegian said on Monday. The company’s shares were down about 14% in late morning trading.
A Norwegian plane landing. Photo: Jørgen Syversen.
A Norwegian plane landing. Photo: Jørgen Syversen.

A Norwegian government decision not to approve additional financial support for hard-pressed budget airline Norwegian Air, struggling during the coronavirus pandemic, is "a slap in the face," the airline's chief executive said on Monday.

Jacob Schram told a press conference that the government's decision was "very disappointing and feels like a slap in the face."

Meanwhile, rivals were "receiving billions in funding from their respective governments," he said.

Norwegian's future was "very uncertain," he said, adding that the company was looking at various options.

"We can't rule anything out now. When it comes to bankruptcy, layoffs, dismissals," Schram added.

Norwegian’s shares were down about 14% in late morning trading - while the Oslo Stock Exchange index was up almost 1%, buoyed by the news of Joe Biden's win in the US presidential election.

Distort competition

Iselin Nybo, minister of trade and industry, said the government's main consideration was to ensure that the Norwegian aviation market had "an adequate offer and healthy competition."

"Norwegian has asked for financial support worth billions, and the government has considered that in this situation it was not a sound use of public funds," she said, noting it could potentially distort competition.

In May, the airline secured about half of the 6-billion-kroner (576-million-dollar) fund Oslo made available to airlines. The loan guarantee scheme was created to offset the drastic drop in passenger numbers amid restrictions imposed during the  pandemic.

Norwegian also agreed on a restructuring plan with bondholders and lessors of its fleet. The airline's main shareholders include Irish aircraft leasing company AerCap Holdings.

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