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Norwegian’s net debt has increased steadily from NKr22bn ($2.3bn) in 2017 to NKr58bn at the end of last year — in large part due to accounting rule changes on leases — just as its equity market capitalisation has plunged to NKr1.8bn. Analysts at ABG Sundal Collier show that its net debt to ebitda (earnings before interest, tax, depreciation and amortisation) ratio is 7.1, compared with an average of 1.8 for European carriers — and just 0.5 for low-cost airlines such as Ryanair and easyJet. Norwegian, like almost all carriers, is taking drastic action. On Tuesday, it announced 3,000 flight cancellations — or about 15 per cent of its capacity between mid-March and mid-June — and warned staff in an internal note “to be prepared for a scenario where we reduce capacity by up to 50 per cent”. Few in the industry such as executives, analysts or investors know how big the knock will be. Analysts at ABG already worried last week that Norwegian could break the book equity covenant on its bonds in the second quarter of this year. They also forecast that its net cash of NKr3bn — compared with revenues of NKr43.5bn last year — could shrink to just NKr880m by the end of June. Mr Lobbenberg said that on his models of falls in unit revenues this year of 3-7 per cent, “Norwegian lives” in each scenario. But, he added: “If it’s materially larger, you do challenge those covenants”. Thus many speculate that Norwegian will need to tap shareholders for the fourth time since March 2018. ABG analysts estimated that Norwegian could have to raise up to NKr3bn, close to double its current market value, to avoid facing the same worries next year.

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At this point, analysts calculate that if the situation of slowdown in activity continues and liquidity is not achieved through other means, such as public aid, it could run out of cash in June, which would jeopardize its survival

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no doubt cause an uprising from other European carriers left to struggle unaided.

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Norwegian to suspend more than 4000 flights and implement layoffs
Press release • Mar 12, 2020 16:36 GMT

Following the U.S. ban on travel from most of Europe and the escalating coronavirus situation, Norwegian has decided to ground 40 percent of its long-haul fleet and cancel up to 25 percent of its short-haul flights until the end of May. The changes apply to the company’s entire route network.

Jacob Schram, CEO of Norwegian said: “This is an unprecedented situation and our main priority continues to be the care and safety of our customers and colleagues. The new restrictions imposed further pressure on an already difficult situation. We urge international governments to act now to ensure that the aviation industry can protect jobs and continue to be a vital part of the global economic recovery.”

40 percent of long-haul capacity to be cancelled

From March 13th to March 29th, we will cancel the majority of our long-haul flights to the U.S. from Amsterdam, Madrid, Oslo, Stockholm, Barcelona and Paris.

From March 13th to the end of May, all flights between Rome and the U.S. will be cancelled.

From March 29th until the end of April, all flights from Paris, Barcelona, Madrid, Amsterdam, Athens and Oslo to the U.S. will be cancelled.

All routes between London Gatwick and the U.S. will continue to operate as normal. Our goal is to reroute as many of our customers as possible through London during this difficult period.

The short-haul network heavily impacted

Norwegian will also cancel a large share of its domestic flights in Norway and flights within Scandinavia, such as Oslo-Copenhagen and Oslo-Stockholm. Flights to Italy will also be cancelled. Domestic and intra-Scandinavian flights will be combined to re-protect our customers.

Customers booked to travel on affected flights will be contacted to discuss their options including rebooking onto a flight at a later date. Due to a high number of enquires we encourage all customers to check our website www.norwegian.com/updates for the latest travel advice. If your travels are past April 15th, 2020, please refrain from contacting our Customer Care team at this time.

Layoffs

During a pandemic it is Norwegian’s policy to prioritize and safeguard the health and well-being of employees while ensuring Norwegian's ability to maintain essential operations and continue providing services to our customers.

Due to the extraordinary market situation as a result of the coronavirus, and thus a dramatic drop in customers and subsequent production decline, we must look at all possible measures to reduce costs. This unfortunately also includes temporary layoffs of up to 50 percent of our employees and the number may increase. All departments will be affected by the temporary layoffs.

We have initiated, in consultation with the unions, a discussion and mapping process and will then return with leave notices to affected departments, stations and employees.

Norwegian in the UK and Ireland:

Norwegian carries almost 6 million UK passengers each year from London Gatwick, Edinburgh and Manchester Airports to 30 destinations worldwide

Norwegian is the third largest airline at London Gatwick, with 4.6 million yearly passengers, and over 1,200 UK-based pilots and cabin crew

In 2014, Norwegian introduced the UK’s first low-cost, long haul flights to the U.S. - the airline now flies to 11 U.S destinations, Buenos Aires and Rio de Janeiro from London Gatwick

Norwegian is the only airline to offer free inflight WiFi on UK flights to more than 30 European destinations and 13 long-haul destinations.

The airline has one of the youngest aircraft fleets in the world with an average age of 4.6 years, including next-generation Boeing 787 Dreamliner, Boeing 737 MAX and Boeing 737-800s

Norwegian has been voted ‘Europe’s best low-cost carrier’ by passengers for six consecutive years at SkyTrax World Airline Awards from 2013-2018, along with being awarded the ‘World's best low-cost long-haul airline’ in 2015, 2016, 2017, 2018 and 2019

Norwegian Reward is the airline's free to join award-winning loyalty programme offering members CashPoints and Rewards that reduce the cost of Norwegian flights

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