Norwegian Air has filed for bankruptcy protection in Ireland, becoming the biggest casualty of the coronavirus pandemic in the aviation sector to date.
The troubled low cost carrier has asked an Irish court to carry out a process of examinership. 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. This should protect the group’s assets while it tries to slash debt levels and find new funding as part of a restructuring. It is expected to take as long as five months.
Norwegian will continue to operate its flight schedule, which is reduced owing to Covid-19, during the process and its shares will still be traded on the Oslo stock exchange.
Jacob Schram, the airline’s chief executive, said the the decision to request bankruptcy protection had been taken to “secure the future of Norwegian for the benefit of our employees, customers and investors.
“Our intent is clear. We will emerge from this process as a more financially secure and competitive airline, with a new financial structure, a right-sized fleet and improved customer offering.”
Schram said the company wanted to work with its stakeholders to find solutions to its financial problems, and intended to save as many jobs as possible.
Based on Norwegian’s current cash position and the projections going forward, the company believes it has sufficient liquidity to go through the above-mentioned process.
At present, It is only flying six of its aircraft and will only operate domestic Norwegian routes during the winter.
Before the pandemic, Norwegian was operating more than 100 planes from several European bases, including London’s Gatwick airport.