Norwegian Air has reported a loss of NOK 5.4 billion (£460 million) for the six months to June, leading chief executive Jacob Schram to warn that the state aid the carrier has received from Norway “is not enough”.
Europe’s third-largest low-cost carrier, Norwegian Air returned 15 aircraft to operation in July after grounding all but eight aircraft through the second quarter of the year.
But the bulk of its 140-strong fleet remains grounded and the majority of its 8,000 employees on furlough or laid off.
The carrier was operating solely on domestic routes in Norway until July 1 when it re-started 76 routes and brought 600-plus employees back to work.
However, the carrier noted: “The market is still highly uncertain, mainly due to changing travel advice from governments across Europe.
“As government travel advice changes, demand is immediately impacted.”
Schram said: “The Covid-19 crisis has impacted aviation and the travel industry particularly hard, and most companies need government support to survive.
“We see many of our main competitors receive considerable liquidity support from their governments.
“We are thankful for the loan guarantee made available to us by the Norwegian government.”
But he warned: “Given the current market conditions it is not enough to get through this prolonged crisis.”
Schram noted: “We entered 2020 expecting a positive result and the best summer ever thanks to successful cost-saving initiatives and a more efficient operation. Then we were hit by Covid-19.”
The carrier came close to failure in April-May before securing a state-guaranteed loan of NOK3 billion (£240 million) from the Norwegian government.
It successfully converted a substantial amount of debt to equity, raised a further amount through a share issue and cut costs.
Norwegian declared four of its Scandinavian subsidiaries bankrupt in April and terminated the contracts of 4,700 pilots and cabin crew, more than 40% of its workforce
However, the rescue left the carrier still heavily in debt, having begun the year with debts in excess of €6 billion.
Norwegian has said the majority of its fleet will remain grounded for at least a year and be reduced by one third once the crisis is over.
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