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The risk of losing money was too high. Therefore, the government says not to enter with a billion in support for the airline Norwegian. FRP supports the decision, but is open to discuss other types of support.
On Monday morning, before the Oslo Stock Exchange opened for trading, Ministers Iselin Nybø (V) and Knut Arild Hareide (KrF) announced that the government would not grant Norwegian’s request for a billion in support. additional.
The Norwegian stock fell like a stone when the Oslo Stock Exchange began trading at 09:00 on Monday morning, quickly falling by more than 22 percent.
Too much risk
– The risk assessment weighed heavily, the Minister of Commerce and Industry, Iselin Nybø confirms to VG.
– We have analyzed the financial structure: they have a significant debt, 40,000 million NOK in total. It is too risky to invest in community funds in a company like Norwegian. We’d rather consider broad measures that Norwegian can also take advantage of, Nybø says.
Neither Nybø nor Hareide will state exactly what Norwegian had asked for in state aid, apart from the fact that it is in the billions.
– Norwegian can decide for itself if it wants to come out with the numbers, says Nybø.
The state’s extraordinary contribution to aviation this year amounts to NOK 13 billion, says the ministry.
Domestic flight purchases, longer credit repayments and low fares are some of the future measures.
Norwegian has already drawn NOK 3 billion from a loan guarantee scheme that was put in place before the summer.
– That plan is worth six billion crowns. Norwegian has withdrawn three billion that were allocated to them. SAS and Widerøe have chosen not to rely on that scheme, Nybø says.
According to Transport and Communications Minister Knut Arild Hareide, NOK 1 billion has been set aside for the purchase of air routes in the first half of 2021.
The Center Party will not agree that the state does not represent the Norwegian. They call on the Labor Party and the Green Party to come together to instruct the government on the matter, NTB writes.
– We will challenge the Labor Party and the Progress Party to join the SP in instructing the government to find a solution to secure jobs and route offers in Norwegian, says the leader of the business committee in Storting, Geir Pollestad (Sp) .
The Progress Party will now negotiate with the government on measures for aviation. Hans Andreas Limi (Frp), a member of the Storting’s finance committee, says he understands that the government will not take any major risks in Norwegian when shareholders hesitate to inject more money into the company.
“But we are looking for other measures that can help Norwegian aviation,” Limi told VG on Monday morning.
In its alternative budget for 2021, the FRP wants to eliminate the seat tax on flights, which the government wants to reintroduce starting in the new year.
At the same time, the government wants to raise the VAT rate to “normal” status by 12 percent for tourism starting in the New Year.
FRP has not set out to continue the low rate in 2021, but Hans Andreas Limi says they are willing to look at it in light of the content of the crisis package the government unveils on Tuesday.
Norwegian CEO, Jacob Schram. Photo: Frode Hansen
Fist in the abdomen
“The fact that the government has now decided not to provide Norwegian with further liquidity support is very disappointing and is perceived as a real punch to the stomach for everyone at Norwegian who has fought for the company and at a time when our competitors they receive double-digit billions from the authorities in their countries, “he said. Norwegian CEO Jacob Schram in a press release.
Norwegian believes that with more support, the company would emerge from the crown crisis as “a more sustainable and lighter airline, with a new structure and better operations.” The road ahead becomes more difficult without support, says Schram.
Norwegian writes in their press release that they depend on support to survive.
– With the tourists that we fly to Norway, we contribute to maintaining 24,000 jobs in the country and a value creation of around 18,000 million crowns a year. That alone would indicate that continued support for the company would be a profitable investment from a socio-economic point of view, Schram says in the report.
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Large shareholder says no
According to DN, the leasing companies now own more than half of the shares in Norwegian, after converting the debt into shares.
Timothy Ross, who heads the investor department at the leasing company BOC Aviation, which is Norwegian’s second-largest shareholder, told DN last week that they will not contribute new, fresh capital into the airline:
– We are not involved in any Norwegian refinancing at this time. We have never contributed fresh money to Norwegian, nor will we ever, says Ross.
