News: Norway government says will not give more support to Norwegian Air

BBC writes about is as well: https://www.bbc.com/news/business-54841427

Just my luck. Norwegian had the best deal to Paris. But, it is not like I am going anytime soon now, anyways.

I thought they already went out of business. No one is flying anywhere anyway these days

They were close recently but managed to convince the leasing companies they owed money to convert their debts to shares in the company. That allowed them to access a bit of financial support from the norwegian government. They are flying a bit at the moment, but I think their network is reduced to mostly domestic flights in Norway and Sweden.

I will miss them when travel resumes! Had several great trips, including one from Boston to London in 2018 that I would not have been able to do without the low fare.

Cynthia

Hope they can survive. Flying out of Newburgh was amazingly easy, my college attending daughter dropped me off once and didn't realize it was the airport. Cheap fares to Ireland were great, aircrews were pleasant, flight was short.

Story time:
Oldest daughter was being married in Providence, RI.

College daughter needed a car to make it to wedding...I pick her up and she drops me at Newburgh, I fly to Dublin and spent 7 days enjoying the country, fly to Dublin to Providence for ceremony. ($300 round trip. It would have been $1150 out of Syracuse.)
Drive daughter back to college, and back to house.

I was slightly stressed at being late for ceremony, as I was also officiating it...the groom's dad had passed earlier, so it was nice to have the 2 mom's escorting the couple. My only wedding to date, they're still married!

Norway's government set a high bar for Norwegian Air to receive its first package of government loan guarantees -- a bar I suspect the government thought was too high for the airline to meet. One requirement was raising additional capital through a share offering that was going to be priced at about a dime per share. Surprisingly (to me and probably to Norway's government), the offering was oversubscribed. Perhaps the Norwegian government learned to deny the request for funds instead of setting another high bar that is met by people standing in line to throw capital into the money pit that Norwegian Air has become.

One more thought. I like former Circle K CEO turned Norwegian CEO Jacob Schram, but I hate this comment...

"The fact that our government has decided to refrain from providing Norwegian with further financial support is very disappointing and feels like a slap in the face for everybody at Norwegian who is fighting for the company when our competitors are receiving billions in funding from their respective governments."

Slap in the face? The difference, of course, is that other airlines were not continuously teetering on the edge of insolvency due to years of bad management and bad strategy the eve before COVID-19 was a thing.

Perhaps the Norwegian government learned to deny the request for funds
instead of setting another high bar that is met by people standing in
line to throw capital into the money pit that Norwegian Air has
become.

Perhaps, but they have also looked at Norwegian and their recent expansion. And I think the final nail in the coffin was an announcement from Norwegian that they planned to relaunch transatlantic flights early next year. The Norwegian government is not interested in subsidising unprofitable long haul flights from France and the UK.

Great point, Badger. I forgot that Norway's government had previously announced/intimated that it wanted to support air service for Norway, not transatlantic flights. Wizz Air's establishment of a base at Oslo (with zero government funds needed) also likely reduces the government's willingness to give additional dollars (err... kroner) to Norwegian Air.

They are probably not that keen on supporting routes in other parts of Europe either. After the announcement Norwegian suspended their remaining Swedish domestic routes as well as other european routes to and from Sweden and Denmark.

SAS and Widerøe are doing a good job of connecting Norway, so there will not be any disaster if Norwegian goes under. And if "new Braathens" becomes a reality and Wizzair manages to establish itself in Norway there will be enough competition on the Norwegian domestic market.

I missed the Braathen announcement. All the more reason for the government to decline additional support for Norwegian Air Shuttle.

Almost all of the major airlines have been teetering on insolvency for years due to excessive debt loads placed on them by venture capitalists, poor management, and excessive competition. They are the poster children for zombie companies. They need to go thru bankruptcy; which is a system designed to place the cost of making them profitable on the investors vs. the current government bailouts which only encourage business as usual and place the cost on the taxpayers.

The Norwegian gov't has seen the light, and while we may cry over the loss of cheap airfare, in the long run it's much less expensive to force companies to go out of business if they cannot be profitable. We and our children will be paying for these bailouts for decades, with nothing to show for the expense.

Norwegian have applied for bankrupcy protection in Ireland. If approved, they have 150 days to save the company if I'm not mistaken.

https://www.msn.com/en-us/money/news/norwegian-air-files-for-bankruptcy-protection/ar-BB1b8Gv0?ocid=msedgdhp

The budget carrier said in a statement on Wednesday that it has decided to file for examinership in Ireland, which is where its aircraft assets are held. Examinership allows companies to seek a court's protection from creditors for up to 100 days, and is the rough equivalent of Chapter 11 bankruptcy in the United States.