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Norwegian on the Brink: “We Need Help Now”

Norwegian Max airplane flying to Norway

Following a turbulent couple of years, Norwegian are once again on the brink of failure. Their CEO asks the Norwegian government for cash to stay in the air, “in weeks, not months.”

The rapid spread of the coronavirus around Europe has caused chaos to air travel perhaps more than any other industry. Now, one of the biggest names in European air travel is on the verge of bankruptcy once again.

Norwegian have cancelled thousands of flights as a result of the coronavirus-related drop in demand. In addition, around 5,000 of their staff have been laid off. Their CEO Jacob Schram—who currently sits in home quarantine after recent travels as per Norway's new emergency measures—is asking the Norwegian government for urgent help.

Jacob Schram Norwegian Air
Norwegian Air CEO Jacob Schram

Weeks away from collapse

Schram admits that Norwegian is “weeks, not months” away from collapse unless they receive a cash injection. He says the company is now doing everything they can to get through what he describes as the biggest crisis in the company's history.

That's quite a statement given how turbulent the last 18 months have been for the carrier. Norwegian have been hit by the grounding of the Boeing 737 MAX fleet, which is still unresolved. They then required agreement from creditors to extend the period of bond repayments, which was far from certain.

So what's happening now?

Virtually every airline around the world is now in crisis following the outbreak of the coronavirus. For many it's a double whammy. First the drop in demand, second the implementation of drastic measures by authorities around the world in an attempt to curb the spread of infection. For example, Denmark announced the closure of its borders last night.

In a stock exchange notification on Friday, Norwegian said the turmoil in capital markets has led to the effective closure of access to loans or credit. “It hurts me to have to push the button on about 5,000 people, about half our employees,” said Schram.

Norwegian Air Boeing 787 Dreamliner

What Norwegian wants

In the stock exchange notification, the company said “we need immediate concrete measures to strengthen our liquidity in the short term.” Details on the amount of money Norwegian need have not been revealed. When asked what form of aid they want, Schram said to e24 that there are many alternatives.

“What we need is now is a modern form of Marshall aid, which can take us further and get the wheels going again,” said Schram, referring to the European Recovery Program in the years following World War II.

Read more: Coronavirus in Norway: The latest news

Jacob Schram's statements have received support from the rest of the airline industry and its employees, the majority of which also requires immediate action to secure liquidity of the industry.

Patrick Whyte of travel industry website Skift said that Norwegian's position is moving from severe to critical: “Unless it gets significant government help, it won’t survive the crisis.”

Passengers boarding a Norwegian flight

Will the Norwegian government rescue Norwegian?

“I am optimistic the government will help us with the liquidity crisis,” Schram said. But despite the name, the Norwegian government has no financial interest in Norwegian. However, the airline is a critical service provider of domestic flights, short-haul European services, and long-haul flights to the USA.

It is in the interests of the Norwegian government to ensure the airline stays in the air. That's even more so given that the government has recommended that people don't travel unless absolutely necessary.

The government has already taken some steps to ease the pressure on the airline industry. Finance Minister Jan Tore Sanner announced the suspension of all airport fees for the first half of 2020 along with the air passenger tax for a period of 10 months.

In addition, the government announced it would pay a greater share of the bill for any companies making temporary layoffs.

No government guarantees

While the chances seem good that the Norwegian government will step in, there are no guarantees. Prime Minister Erna Solberg cautioned that while her government will implement measures that help companies in trouble, some may still collapse.

Widerøe Dash-8 aircraft at Leknes airport in Norway
Widerøe and SAS are also facing difficulties

She said there are limits to governments’ appetite for major state intervention. “While it’s crucial to help viable companies at a difficult time, some might have to go bankrupt. Not all companies will make it.”

There's also the question of other airlines. The Norwegian government sold the last of its shares in Scandinavian Airlines (SAS) in 2018, but the airline is just as important to Norway's domestic and international transport as Norwegian. SAS recently announced huge winter losses, and have also cancelled thousands of flights.

Not forgetting Widerøe, of course. The small airline's fleet of propellor planes provide a critical transport link to remote communities all over Norway. The airline is also in trouble, cancelling many flights, and have been hit by the closure of nine small airports by airport operator, Avinor.

If the government comes to the rescue of Norwegian, could they justify not helping SAS and Widerøe too?

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About the Author: David Nikel

Originally from the UK, David now lives in Trondheim and was the original founder of Life in Norway back in 2011. He now works as a freelance writer for technology companies in Scandinavia.

35 Comments

  1. Iam a brittish national i have been living in norway for 16 years iam on holiday in thailand my flight to norway is the 19 of march with Norwegian i have have been told if you do have a norwegian passport you will be turned away at entry in norway thats if Norwegian air does not go bust [email protected]

    1. If you have a perminant residence certificate, that is acceptable according to the info released from the dept. of Justice and Public safety. You will of course be expecting to do a home quarantine for 14 days.

  2. One of the thousands of customers here with a long-haul flight on Norwegian scheduled in days, in which my party of 5 cannot travel due to restrictions mandated by the CDC, WHO, and governments; yet nothing can be done for the paying customers who DID invest in this failing company. Sadly we are out thousands of dollars as a result. The right thing to do would be to pay the people back who were simply buying a good which cannot be delivered.

    1. If your flight has been cancelled, check with your credit card company, if you paid with credit.
      Because the product/service was not delivered as promised, you may be able to recoup your money. Also if you bought trip insurance, you may be able to get your money back due to the cancellation

  3. So Norwegian moved a large portion of the Company to Ireland to avoid paying taxes in Norway and avoid troublesome Norwegian labor laws..
    And now they want the Norwegian government to bail them out.. The answer should be a loud NO!

    1. And so 1000’s of employees will suffer the consequences of the company’s move. Punishing the hard working employees for the company’s decisions hardly seems an appropriate option.

    2. Agree with you Morten. Airlines are quick enough to save money using any legal trick they can find, fleece their customers with stupid baggage restrictions or charge high luggage fees. Buy a fleet of air planes that they don’t have the money to buy and then TROUBLE. Who do they want to bail them out, the same governments, i.e. taxpayers, they have been ripping off.

  4. This is the second time . I hope They go BANKRUPTCY this time and pay back their clients.
    I travelled with them one time and They are so expensive . Ryan Air is cheaper.

    1. Think about what you are saying.
      If they go BANKRUPT, then of course they won’t pay back their clients.

      You can only have one thing, you can’t have both!

  5. We are 2 Canadians in our 70’s who visited family in England and are stranded in Spain not knowing whether our March 31 flight to London will be honoured. This effectively prevents us from booking an earlier return from London to Canada as we don’t know whether we can get to London. It seems that the least the Norwegian government should do, given the unpredicted crisis of the coronavirus, is guaratee that Norwegian will be able to deliver booked passengers to their destinations.

  6. Norwegian is the worst run airline in the industry. The company offered ZERO assistance to its customers affected by travel disruptions due to the Corona Virus instead keeping the money collected for cancelled flights and charging $150 per ticket to rebook. The company has simply turned into a money grab and implements deceptive marketing practices in which to get it. The corona virus attacks and kills the weak. Let Norweigian go down. It doesn’t deserve saving.

    1. I think alot of the comments are silly. People aren’t thinking from the Upper managements perspective.

      If the 2 options, placed in front of you were.

      A) Go Bankrupt today
      B) Move the company to operate from Ireland to make costs savings and as a result (not go bankrupt and save jobs).

      Then of course any smart person would choose option B.

      IF Norwegian air were making alot of profit in the first place, then they probably wouldn’t have moved their company to Ireland and would have kept it in Norway.

      The airline industry is very competitive and therefore you need to keep your costs down as much as possible.

      I don’t blame them for the decisions they have made.

      I would rather still see them in business (if that means I need to pay an extra 10 bucks for luggage) then so be it.
      At least I would have the choice of flying with them..

      rather than hope they go bust which will only affect me in the long run because there will be less competition and the other bigger airlines will therefore increase their price.

      Guys aren’t thinking strategically here!

  7. The Government cant let Norwegian or WiderØe go Bankrupt, One is the National Airline the other the countries internal Airline. Now is not the time to complain about an Airline.
    Norway has its Oil Fund or pension fund. Well im afraid now is the time to use some of that fund for the benefit of Norwegian people, The fund is worth Trillions of Nk. This is an emergency situation, and if the Government sit on this money now and let these companies go Bankrupt they should be kicked out . Im sure the future pensioners will be in favour of using some of this money, after all it is growing like a ticking clock. 5 million Krone would not make a dent in it

    1. 5 million kroner??? That’s not even a drop in the ocean of Norwegian’s debts. Many people would disagree with you regardless – Norwegian makes most of its revenue into its Irish subsidiary on routes such as London-New York.

    2. Norwegian Air isn’t the national airline of Norway. Another point, example really, Norwegian are selling flights from Norway to Turkey in the following days and weeks, prices much higher for one. Second, Turkey aren’t allowing flights from Norway… So please John, explain how that is right? Finally, I like NA, BUT they are terrible when a problem arises.

  8. I have a flight with them on may 1st from berlin to ft lauderdale. Just want my money back. I flew this airline line many times and this they are the best travel to europe. Service was outstanding. New planes and comfortable. Norweigan I hope you get thru this situation, because I will differently fly with you again.
    Maryann and Joseph Filippelli

  9. So, we have flights booked in June from Orlando to London and a week later from Paris back to Orlando. These flights are not officially cancelled yet, so no refunds offered. The email they sent was don’t call in if your flights are after May. phone lines to busy with the immediate cancellations. From what I can see the airlines will most likely be out of business by that point. I guess my only option is to wait for them to officially go bankrupt, at which point I can put a claim into my credit card in hopes they will refund???? long shot!
    Of course this all is depending on the state of the world by that point………………. 🙁

    1. Dear government of Norway,
      I am an American who has fallen on live with your beautiful nation and your culture and your people. The great and promising airline that bears your nation’s great name is the very best airline on the planet…among several that are elite. I travel often and widely throughout the world and I have always been impressed with this truly GREAT airline. There is a rwad9n that for several years running it keeps betting praised by customers as the best. This airline has faced many challenges and jealous smiles from other carriers as it co tinue to grow. You must not let circumstances or those who hope to see it fail to ever go under. One day Norwegian airline will be the envy of the world. Yes I’m truly confident of this prediction and your citizens will be justly proud just as we Americans are proud of Google, and Apple, etc.
      I urge you to give this wonderful ptofessional, already excellent airline your total and generous financial support. Just as America did not let genetal motors fail, do too, should Norway come to the rescue of the best airline there is. Think of all the people, and tourist dollars, Norway as a nation has garnered primarily because Ametican and other tourists like me have visited you spectacularly beautiful country , in my case several times ! …from Bergin to Oslo….and I hereby add ALWAYS only on Norwegian airlines. Thank you madam President and legislative leaders for your pro or attention to thus vitally important matter. If you do what is wise, know that one day- and sooner rather than later- your decision to hiv3e Norwegian airlines your full support will be most gratifying and will be viewed as a great accomplishment. Take care,
      Respectfully submitted,
      Timothy Ernest K., a proud and LOYAL Norwegian airlines customer.

  10. I have used Norwegian for many years for both business and pleasure and have always been treated well.

    Norwegian is as good as all the good airlines.

    When flights have been changed or cancelled they have repaid or fixed the flight.

    I hope they survive together with others

    DAVID

    A Brit in SWEDEN

  11. This is crisis guys and we all should think logically here if it was our personal company how do we save it and the numbers of our staffs and their families, nobody wished for this not even the airline in question so pls let’s speak with some caution and think about the good times with this airline and their comfortable new airbox we’ve all been enjoying, there are always times like this in life so let’s be positive that things gets under control soon with this virus of a thing.

  12. Norwegian certainly has helped and is helping customers to get better prices on transatlantic routes through increased competition. This is a segment in which other European low cost carriers are not very active. It would no be good for the wallet of us customers if Norwegians goes bankcrupt.

    Luckily we customers can help Norwegian as well. Flex Fares are fully refundable. If each customer was to book a Flex fare far in the future it would help Norwegian to raise some cash. Risk on the customer side would be low, given that bankruptcy would be covered through credit cards or travel insurance.

  13. The management at NorwAir are crooks. I have a flight to Oslo on Mar29. With Norway shutting down her border, the airline would not cancel the flight so I can get a refund. They rather fly an empty plane than giving back money to customers. I’ve bought cancellation protection, but they said I must have an illness with doctor’s verification in order to get my refund. I wish the management would loose all of theirs personal wealth & face hardship just like their poor employees must endure when bankruptcy hit them!

  14. I am a Norwegian man from Wisconsin .USA . My parents were born in Norway . I have lived in Amsterdam Netherlands for awhile back in the late 1980’s and the 1990’s .The Airlines that I have enjoyed is KLM and Lufsansa plus British airways . Norwegian Air hasn’t been good . I believe that they are a little greedy and Screw their Customers with extra baggage fees and change flights extras fees .They don’t need to be that way as a Airlines . KLM has never screwed me over , Ever. ! I fly from San Francisco to Amsterdam on their planes plus on British airways too into London .

  15. We flew from Austin to London earlier this month and it was a wonderful experience. It was very inexpensive, We did pay extra for extra baggage but that was only fair. We were so surprised at how luxurious the plane was and all of the staff were so professional especially a guy named Timothy at the airport in Austin he was just exceptional. I hope they keep their jobs.

  16. All the members of my family as well as friends have found Norwegian as a wonderful airline to fly with. It is worth saving from bankruptcy.

  17. I have tickets to Rome from Chicago in September. If they go bankrupt before then what’s the likelihood of a refund?

  18. I am a regular Norwegian customer & Norwegian is an excellent airline. The airlines are in turmoil and state aid is needed. We as a society can’t expect competitive pricing and then laugh or scoff at helping them when such turmoil goes on at the behest of pen pushing public servants who have the most secure jobs in the worlds themselves. No non-government company can be prepared for this type of event that the Coronavirus has created.

    Norwegian is an excellent airline and needs to be supported through this period. Stop flying for a few weeks by all means, but in the mean time state aid for paying staff and having the resources ready to restart services as soon as this crisis is over.

    We will allow ourselves to all enter a crisis if we don’t support the most vulnerable parts of our economies through this crisis.

    Hurry. Time is short.

    1. Matthew, Norwegian are a good airline but not until a problem arises, in my experience. Six months of emails until they paid the compensation that law stated they must pay, being one example. Telling me to buy such and such when they lost my luggage for five days, then said no, being another.
      Secondly, they are heavy in debt, even before this virus, they love expanding. Living in Bergen I found once they pushed SAS far down the pecking order they upped prices and closed certain direct routes. If I lived in Oslo, Norwegian would be my first preference of choice.
      Lastly, and I don’t think this applies to you, people must stop thinking this is the state run airline, it isn’t. Like British Airways it isn’t state owned just because it uses a country in its name. Yes I know BA once was but Norwegian has never been.

  19. Norwegian is poorly run like virtually all Norwegian companies. No one cares about ooor management because the government is always expected to save them. Like Evry, Telenor and others, these leaders need to understand that there are consequences for poor management.

  20. we have flights from Denver to Paris in May that we have planned and saved for 2 years. God I pray this flight goes and that Norwegian is saved. I can’t afford to go anywhere in Europe unless I fly Norwegian. They have given so many people opportunities to get to Europe. Please help them.

  21. Flights used to be the preserve of the bigoted expensive national carrier so think long and hard about debasing cheaper priced airlines.The wealthy keep national carriers afloat and those airlines will always get government help and that is not fair too.

  22. Ok remove ‘bigoted’ but an also practice is the national airlines have a privilege of being closer to airports serving Major Cities/Capital. On the basis of a I’ll scratch your back as long as you scratch mine. This practice guarantees the first and business classes and of course a much higher profit margin.

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