Norwegian Air to cancel 85% of flights and lay off 90% of staff

By Terje Solsvik

OSLO (Reuters) - Norwegian Air <NWC.OL> will cancel 85% of its flights and temporarily lay off 7,300 employees as result of the growing coronavirus crisis that has strangled demand for air travel, the carrier said on Monday.

U.S. President Donald Trump extended his restrictions on travel from Europe on Saturday to include Britain, Norwegian's biggest destination for transatlantic flights, while other nations also severely limited air traffic.

Norwegian Air said the temporarily layoffs made up about 90% of its workforce and included pilots, cabin crew, maintenance and administrative staff.

"What our industry is now facing is unprecedented and critical as we are approaching a scenario where most of our airplanes will be temporarily grounded," it added.

A pioneer in transatlantic budget travel since 2013, Norwegian Air quickly became the largest foreign airline serving the New York region and a major player at other U.S. airports.

All flights to the United States will now be suspended, the company said.

"As of March 21, the company will primarily fly a reduced scheduled domestically in Norway and between the Nordic capitals," it said. "Limited schedule will remain in place until at least April 17 but will be reviewed on a regular basis."

Norwegian Air's shares fell 14% on Monday to a 15-year low of 6.7 crowns in Oslo and are down 82% this year.

Having lost money each year from 2017 to 2019 and raised cash from shareholders on three occasions, the company's debts and liabilities had grown to 82 billion Norwegian crowns ($7.9 billion) by the end of last year.

The carrier and the industry associations it belongs to have called on authorities in Norway, Britain and elsewhere to help. Norwegian Air said on Friday it needed access to cash "within weeks, not months".

Norway's minority government said last week it was looking at measures it could take to help the industry, and the opposition on Monday called for specific measure to help protect jobs and companies.

Scandinavian airline SAS <SAS.ST> said on Sunday it would halt most traffic and temporarily lay off up to 10,000 employees, or 90% of the workforce.

(Reporting by Terje Solsvik; Editing by Gwladys Fouche and Pravin Char)