Having survived a near-death experience during the COVID-19 lockdown, low-cost carrier Norwegian seems to be struggling again. The Swedish National Debt Office announced the rejection of the air carrier’s request for a state credit guarantee.

Norwegian Air Shuttle was already facing financial difficulties before the COVID-19 pandemic hit. According to Reuters, while SAS has been granted hundreds of millions of dollars from the crisis rescue package program, Norwegian application has now been rejected.

Sweden has set its credit guarantees that assures financial support for most affected airlines. However, the programme can only be granted for air carriers that have been financially viable on the last day of 2019. Norwegian has struggled financially for several years. Quick expansions and low-cost long-haul gambles left the carrier with about $8 billion in debt and liabilities at the end of 2020. This indicator signifies Norway‘s carrier as not financially sustainable for program requirements.

"The Debt Office’s assessment in regard to Norwegian is that as of 31 December 2019 there was a very high risk that Norwegian would not be able to fulfil its financial commitments and that the company was not deemed capable then of managing further indebtedness," it said in a statement.

As a spokesperson for Norwegian told Simple Flying, the Debt Office‘s decision process had been somewhat haphazard. At first, the airline was told that the application would not go through. Afterwards, the authority changed its desicion with reference to European Union competition regulation concerns, before declining the application once again. 

It appears the latest decision is final and cannot be appealed.

“We meet all of the requirements, so the only way to interpret this rejection is that the authorities do not want competition in Sweden,” the spokesperson wrote in an email.

Sweden has granted about $173 million (1.5 billion Krona) credit guarantees under the programme for Swedish-Danish SAS.

Earlier this year, Norwegian Air Shuttle was guaranteed a $300 million (NOK3 billion) loan financial support package  from the Norwegian government.