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Watch: Norwegian Air on brink after support plea denied
Beleaguered Norwegian Air (NAS.OL) has said it may run out of cash in the first quarter of next year, as the COVID-19 pandemic continues to weigh heavily on its top line.
Cash equivalents for the airline were NOK3.4bn ($376m, £285m) by the end of September, a decrease of almost NOK1.6bn since the end of June, the company said in its Q3 earnings report.
The company said it is dependant on additional capital to continue to work in Q1 2021.
Norwegian’s Chief Executive Jacob Schram said in a statement on Tuesday: “Our third-quarter results clearly show that the effects of the global COVID-19 pandemic continue to heavily impact our operations and financial position.”
Operating losses for Q3 stood at NOK2.8bn, down from a NOK3bn profit in the same period last year.
The air carrier has been heavily hit by the coronavirus pandemic, troubles that were still evident in its October traffic report.
The company said: “The capacity was 93% lower than last year with a load factor of 55.3%. On average Norwegian operated 21 aircraft in October, mainly on domestic routes in Norway.”
On Monday, the Norwegian government said it will not provide extra financial support for the airline, which had said in August that it would run out of money in Q1 2021 unless it received a fresh cash injection.
In a statement, the Ministry of Transportation rejected proposals for cash to support the business, which has been badly affected by widespread COVID-19 lockdowns.
The airline has been a trailblazer in creating low-cost routes over the Atlantic, and its rapid expansion left it with ballooning debt bills. By mid-2020 these totted up to close to $8bn ($6bn).
Norwegian Air’s July passenger volume fell by 90.4% on the year, after the COVID-19 crisis and global lockdowns saw most of its fleet grounded. It flew only 356,093 passengers during July 2020, compared to 3.7 million in the previous year.
Shares dipped by 10.5% in early trade in Oslo following the report, having closed down nearly 11% the day before.
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