The government of Norway has announced that Norwegian will not receive any further financial support. Iselin Nybo, Norway’s minister for trade and industry, said that the government considers further support for the airline as not a “sound use” of taxpayers’ money.
Norwegian has responded with dismay as the funds it had requested were necessary to maintain operations throughout the COVID-19 crisis. The airline company remarks that it is now “facing a very uncertain future”, adding however that it will “do everything in our power to get through this crisis and to continue doing what Norwegian has been doing for almost 20 years: Ensuring competition and providing affordable fares for all”.
Norwegian’s CEO Jacob Schram described the government’s decision as “very disappointing” and which “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”.
Schram goes on to reiterate the fact that the airline is part of Norway that offers essential domestic routes, such as from Kristiansand in the south to Svalbard in the north that he says, “ cannot be replaced overnight” warning that doing so would “consequences for the competitive situation in Norway, like we have seen before”. Schram also notes the emerging unlevel playing field for airlines, with those that are also dependent on support to survive, “receiving billions from their respective authorities”.
Norwegian presents figures suggesting that the airline sustains 24,000 Norwegians and boosts the local economy by approximately 18 billion NOK per year. “That alone clearly demonstrates that even moderate financial support, would constitute a profitable investment for Norway. How anyone could come to a different conclusion is impossible to understand,” said Schram.
Since the pandemic hit in March, Norwegian has made a substantial financial restructuring of 18 billion NOK from debt to equity, and states that it had been forecasting its best summer ever at the beginning of 2020.
“We could clearly see the results of our hard work to go from growth to profitability, which was initiated in 2018. With further support to get Norwegian through this unprecedented crisis for the aviation industry, we would come out as a more sustainable and competitive airline, with a new structure and improved operation. Without support, the way forward has become much more uncertain. However, we will do whatever we can get through this crisis, to the benefit of our hard-working colleagues, our Red Nose Warriors, and our customers,” Schram added.