Norwegian Air has received loan guarantees by the Norwegian Government as a result of the dire airline situation created by the coronavirus.
The 3 billion NOK (Norwegian Kroner), (about 268 million USD) loan guarantee should be enough to keep Norwegian Air surviving until June.
At the same time, SAS will be getting loan guarantees of 1.5 billion NOK (about 131 million USD), and Widerøe and other Norwegian airline operators the same.
The guarantees will be organized through the Guarantee Institute for Export Credit (GIEK).
Conditions of Norwegian Air’s government help
The Norwegian government will contribute 90 percent of the guarantee. External banks, credit institutions or other commercial counterparties must provide the remaining 10 percent.
In addition, to meet the qualification requirements, an equity requirement of at least eight percent was also required at the end of the last quarterly report before the corona crisis.
This requirement was satisfied by both SAS and Widerøe. However, Norwegian must implement measures to obtain security for all the money.
Money to be provided to Norwegian Air in portions
- NOK 300 million will be provided immediately.
- An additional NOK 1.2 billion will be provided if Norwegian can manage to obtain relief in interest and repayments from creditors.
- The last NOK 1.5 billion will be made available when Norwegian Air has improved its equity.
Norwegian Boss: We will do everything in our power
Norwegian Air CEO Jacob Schram, in a press conference following the government decision, said,
“We think it is very positive that Norwegian authorities come with a package of measures for all aviation in Norway. We have been clear that we need liquidity and that we need it quickly”
In an interview with the Norwegian newspaper Børsen (Stock Exchange), Schram said,
“Norwegian was in for a brilliant year before the corona crisis brutally hit. We anticipated the best summer of all time and a positive result for 2020 before this crisis occurred. When the corona crisis came, absolutely all of the revenue disappeared. Then, of course, we got into trouble, along with everyone else in aviation”.
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Featured Image: Norwegian.