Norwegian Air Says It Needs More Time to Pay Off Its $380 Million Debt
Norwegian Air is in a lot of debt, and it's asking its bondholders for more time to pay off a whopping $380 million in outstanding debt.
According to Reuters, the airline is willing to use its take-off and landing slots at London Gatwick (LGW) as security. This is just the latest news in what has been a particularly turbulent few years for the low-cost airline, which has struggled to become financially profitable.
Last year, Norweigan sold five of its Airbus A320neo aircraft to help pay off some of the debt.
“Sale proceeds will be used to repay debt and to increase the Company’s liquidity,” Norwegian said in a statement to the Oslo Stock Exchange at the time.
The airline is also reeling from the grounding of the Boeing 737 MAX following deadly crashes in Indonesia and Ethiopia. The airline had a fleet of 18 MAX jets.
Earlier this year, the airline said that the grounding has made it even more challenging to become profitable, as we wrote earlier this year.
“Due to the uncertainty related to the MAX grounding, the company sees increased risk related to the target of a positive net profit in 2019,” Norwegian said in its earnings report, according to Reuters. Its interim CEO says that the airline does not expect to fly the MAX in 2019.
Some larger airline groups have attempted to bid on a buyout of the airline. IAG, which owns British Airways, made three unsuccessful attempts to buy Norwegian last year.
More recently, Ryanair CEO Michael O’Leary said that it would be “inevitable” that faltering low-cost airlines would close operations in the next several months.
The airline flies dozens of routes, many nonstop, between the US and Europe and North Africa. It recently announced plans to cancel all flights between North America and Ireland on Sept. 15, citing the MAX grounding.
Norwegian had been flying the following routes from the US and Canada to Ireland:
- Providence, Rhode Island (PVD): Cork (ORK), Dublin (DUB), Shannon (SNN)
- Newburgh/Stewart, New York (SWF): Dublin (DUB), Shannon (SNN)
- Hamilton, Canada (YHM): Dublin (DUB)