The airline Norwegian has announced a Temporary Employment Regulation File (FOR HIM) a sus1.600 employees in Norway and a reduction of its routes to 12 routes within the Scandinavian country following the Norwegian government’s decision not to financially support the company to overcome the COVID crisis and due to the restrictions imposed on travel throughout Europe. The Norwegian government on Monday refused to provide additional financial support to the low-cost airline to cope with losses caused by global travel restrictions imposed by the coronavirus pandemic and falling demand. The decision represents a new blow to the programming ofl Alicante-Elche airport, in which the company became the third in the terminal in the years of strong traffic development. His economic ordeal began when the Boeing 737 Max was banned from flying after the accident in March 2019 of an Ethopian Airways aircraft.
Following a crisis-stricken temporary withdrawal, Norwegian returned to operation in July with links to Oslo, Copenhagen, Bergen and Stockholm, but since this week they have retired from Alicante again, and, right now, their financial situation is very complicated because the Government of Norway has denied them an injection of 280 million euros. The airline already closed its base in Alicante when its first crisis erupted. Norwegian has moved this year at the provincial airport a total of 110,156 passengers between January and September, a period in which it did not operate between March and June. The company started very well and in the first three months of the year it carried 81,490 passengers. The confinement arrived and it resumed four links as of July 1, moving 28,665 travelers in July, August and September. Norwegian was key and had eleven air connections between the Costa Blanca and Scandinavia and London.
Norwegian had avoided bankruptcy after winning creditor and shareholder backing in May for a plan to convert 12.7 billion kronor (1.163 billion euros, $ 1.382 billion) of debt into equity, giving it access to state aid. of 3,000 million crowns (275 million euros, 326.8 million dollars), half of the total of a package to the Norwegian airline sector.
However, the company once again runs out of liquidity. “Norwegian has asked for financial support of several billion, and the Government estimates that a use of public funds cannot be defended in this situation, in addition to that it would alter competition, “the Minister of Industry, Iselin Nybø, pointed out in a statement.
The Norwegian center-right executive does plan to reinforce and expand measures already in place, which include tax exemptions and the purchase of a minimum of national routes, among others. “That the government has decided not to give more support in the form of liquidity is very disappointing and feels like a punch in the stomach for many of those who have fought for the company, while our competitors have received billions from their authorities”, noted its CEO, Jacob Schram.
The third low-cost airline in Europe maintains a minimum part of its operational fleet due to restrictions and has previously assured that it could run out of liquidity at the beginning of next year if it does not receive an additional economic injection.
The airline lost 5.433 million crowns (516 million euros) in the first half, almost three times more than a year ago, due to the effects of the pandemic.
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