The Norwegian government has outlined a bailout package for the country’s airline sector of up to 6 billion Norwegian crowns ($537 million), with half of the cash allotted to Norwegian Air, which is facing a financial crisis.
Norwegian Air, which has grounded most of its aircraft and will temporarily lay off 90% of staff, said it welcomed the offer, according to Reuters.
Norwegian is eligible for up to 3 billion crowns but must boost its equity to get the full amount, Industry Minister Iselin Nyboe told a news conference. The carrier could initially get access to 300 million crowns but must also convince commercial lenders to supply 10% of the amount, Nyboe said.
Scandinavian rival SAS could get guarantees of 1.5 billion, while domestic airline Wideroe and other small airlines will be offered the rest.
A further 1.2 billion would be made available if creditors agree to forego interest rates and instalments, while the remaining 1.5 billion hinged on the company’s ability to boost its equity capital.
“Norwegian had financial challenges also before the coronavirus crisis, and with this plan we make it clear that both owners and lenders must contribute to improving the company’s financial situation if the state is to provide guarantees,” Nyboe said.