On May 26, 2021, Norwegian Air Shuttle announced that it has successfully emerged from the Examinership and the Reconstruction. In a statement released on the day, the company explained it has raised $71.7 million (NOK 6,000 million) capital and implemented the Restructuring Proposal, thus concluding the restructuring.
Already in great financial difficulties at the beginning of 2020, Norwegian was also hit hard by the coronavirus COVID-19 pandemic. At first, Norway’s government gave the ailing airline a helping hand in the form of granting $300 million of state aid along with the conversion of part of its existing debt and its financial commitments into new shares in May 2020.
In early November 2020, the government of Norway announced it would not provide further financial aid to the ailing airline after it had asked for a new billion-dollar rescue package from the state. On November 18, 2020, Norwegian Air Shuttle filed for the examinership process in Ireland, and on December 8, 2020, it filed for reconstruction under Norwegian law.
What is the new Norwegian emerging from bankruptcy?
In half the year, throughout the Examinership and Reconstruction processes, Norwegian Air Shuttle went through some drastic changes.
One of the most noticeable changes was the discontinuing of its flagship low-cost long-haul operations. In particular, the air carrier axed its long-haul operations and announced plans to operate a short-haul network primarily in Norway and the Nordics or from the Nordics to Continental Europe.
Together with the shrinking network, the airline’s fleet went from 156 to 51 aircraft, according to the statement. In it, Norwegian also explained having negotiated and signed “competitive” agreements for 4 owned and 44 leased aircraft in addition to 3 aircraft that are under documentation to be retained and leased.
The airline did not specify what aircraft type it intended to operate in the future, only that it would be used on the new short-haul network. Since the air carrier had previously operated only two aircraft types ‒ the Boeing 737 and the Boeing 787 Dreamliner ‒ presumably the fleet will consist of 737s moving forward.
The airline managed to secure “Power by the Hour” agreements for all 51 aircraft through Q1 2022, the statement said.
Financially, Norwegian is emerging from restructuring with a $7.5-$7.7 billion (NOK 63 – 65 billion) smaller debt than it had at the end of 2019. The company’s liabilities amount to $1.9-2.15 billion (NOK 16-18 billion), including 690-750 million (NOK 5.8-6.3 billion) aircraft-related debt, and $840 million (NOK 7 billion) cash balance, according to the statement.