Norwegian multiplied its losses by 14 in 2020

A Norwegian plane at Oslo airport Lefteris Karagiannopoulos / Reuters

Low-cost carrier Norwegian lost NOK 23.04 billion (€ 2.253 billion at current rate) last year due to travel restrictions triggered by the coronavirus pandemic.

The result, which multiplies the net loss of a year ago by 14, was also affected by an impairment of assets of 16.6 billion crowns (1.62 billion euros) related to the planned elimination of a large part of its fleet of aircraft, following the reconstruction process to which the firm is subjected.

• Norwegian abandons the long radius and reduces offer to El Prat

• Norwegian carried 81% fewer passengers in 2020

Revenues fell 79% year-on-year to 888 million euros in 2020. Net operating loss (EBIT) amounted to 2,320 million euros, compared to a profit of 84 million last year.

The performance of the airline worsened in the last part of the year, with the arrival of the second wave of infections and the restrictions established throughout Europe.

Thus, in the fourth quarter, net income barely reached 65 million euros, 93% less year-on-year.

The Norwegian airline transported 574,000 passengers in that period, in which it operated only 14 aircraft on domestic routes, 92% less than a year ago.

The CEO of the company, Jacob Schram, has pointed out, taking stock, that 2020 was a year of "great difficulty for aviation and for Norwegian" and that the double reconstruction process to which it is subjected in Ireland and Norway goes "by good way".

The objective of the process, started in December, is to reduce debt, fleet size (to eliminate long-distance routes and focus on Europe) and attract new capital.

The airline has already canceled aircraft orders it had placed with Airbus and Boeing.

Late last year, the airline received bankruptcy protection in both Norway and Ireland, where most of its assets are registered, and aims to exit the process with fewer planes and less debt.

It is negotiating with lessors to cut its fleet to 53 planes from the 131 it had at the end of 2020.

Pending conversion

The airline admitted that it is "uncertain" to know if it will be successful, but has been "optimistic" that it will be able to raise enough capital to resist at least one more year, until the situation resulting from the pandemic predictably begins to normalize.

"If the company does not exit the restructuring process successfully, it is very likely that it will go into liquidation or bankruptcy during the second quarter of 2021," says Norwegian's note.

Net debt at the end of the year amounted to 3,926 million euros, and the company wants to reduce it by half.

The latest measures promoted by the company laid the foundations for the Norwegian state to announce a month ago that it is willing to give it a hybrid loan of 145 million euros under certain conditions.

Norwegian had already received state aid of 289 million in the spring, after obtaining the support of creditors and shareholders for a plan to convert 1,227 million of debt into shares.