Norwegian Air hopes to emerge from bankruptcy protection “more financially secure” after it posted a fourth quarter loss of nearly £1.4 billion.
The airline entered examinership, in Ireland, in November and reconstruction, in Norway, in December in a bid to reduce debt, fleet size and restructure in order to attract new capital.
Norwegian recently abandoned its low-cost long-haul operations.
Announcing its fourth quarter results today, chief executive Jacob Schram hailed the airline’s “fighting spirit” and said it hoped to fly up to 50 of its 131 aircraft in 2021 as it concentrates on short-haul Europe and Nordic operations. It flew 15 aircraft on average in the fourth quarter of 2020, mainly on domestic routes.
Norwegian carried 574,000 customers, a 92% reduction on the fourth quarter of 2019, and passenger traffic decreased by 97%. Its load factor was 52.4%, a decrease of 32.5 percentage points compared to the fourth quarter of 2019. It operated 90.1% of scheduled flights in the fourth quarter, 94.1% of which departed on time.
The airline noted its financial results were “heavily impacted by Covid-19 and travel restrictions in all markets”. Its net fourth quarter loss was NOK16.6 billion (£1.39 billion), including impairment of NOK 12.8 billion (£1.08billion).
The airline said it reduced its operating expenses, before leasing and depreciation, by 82% compared to the same quarter last year.
It said net interest-bearing debt was decreased by NOK 18 billon (£1.51 billion) and that the examinership process in Ireland, and the reconstruction process in Norway, are ‘on track’.
Plans are to reduce its debt to around NOK 20 billion (£1.68 billion) and to raise NOK 4-5 billion (£340-420 million) in new capital.
Schram said: “2020 was an exceptionally difficult year for the aviation industry and for Norwegian. Consequently, the fourth quarter results are as expected. Unfortunately, many of our employees are furloughed or have lost their jobs, partly due to the company’s decision to cease long-haul operations.
“Despite the difficulties the pandemic has caused, there is a great fighting spirit and engagement within the company, and together we will build new Norwegian when we exit the reconstruction processes.
“Now, we are doing everything we can to emerge as a more financially secure and competitive airline with an improved customer offering, and as soon as Europe begins to reopen, we will be ready to welcome more customers on board.”