Will be in a new meeting with two ministers – E24

This spring’s drama and aviation crisis culminated in April-May for Norwegian.

After intensive work, the company received first the support of the creditors and then that of the shareholders for the first crisis package.

Although the billion-dollar package ensured that the company would not fail, the company’s financial crown crisis was not resolved. Low demand, low traffic, and tight travel restrictions mean Norwegian needs more help.

In late August, management repeated this message and made it clear that they are in the process of stacking a new funding package.

– We will need more help before the end of the year to get through the winter, CEO Jacob Schram said at the time.

Norwegian has been in continuous contact with the Norwegian authorities during the crown crisis, both directly and through the NHO Luftfart industry organization.

Documents from the Ministry of Commerce and Industry, to which E24 has had access, show that Norwegian’s top executive met with Minister of Commerce and Industry Iselin Nybø on June 25.

Trade and Industry Minister, Transport and Communications Minister Knut Arild Hareide and Norwegian CEO Jacob Schram will meet again on September 21.

The request for the meeting was submitted on August 28, the same day that Norwegian presented the accounts for the second quarter.

Little support to get in other countries

The meeting between Norwegian and the two ministers will take place shortly after CFO Geir Karlsen announced on September 2 that Norwegian was in dialogue with Norwegian authorities about potential new support at the DNB Markets consumer conference.

Both the ministry and Norwegian confirm that the meeting will take place.

– I can confirm that we will have a meeting with the Minister of Commerce and Industry and the Minister of Transport. We cannot comment on anything further until after the meeting, says Executive Vice President for Communications Anne-Sissel Skånvik in Norwegian.

Throughout the year, Norwegian has tried to investigate the possibilities of obtaining support in other countries where the company operates, but without much success.

Among other things, the company has contacted the Swedish and Danish authorities who have supported SAS, but Norwegian has been indifferent.

This caused the Norwegian boss to react strongly, as E24 mentioned this summer.

Considering more crisis aid

This spring, the Norwegian state established loan guarantees totaling NOK 3 billion to Norwegian, as part of a broader crisis package for aviation.

Loan guarantees were also offered to Widerøe and SAS, in addition to tax cuts and other measures.

E24 has asked the ministry if the government and the trade and industry minister are considering adopting new financial measures to help Norwegian and aviation.

– We continually assess the situation and emphasize good dialogue with the airlines and NHO Aviation. If it becomes relevant with more measures for aviation or other parts of the economy, we will return to this if necessary, says Lucie Katrine Sunde-Eidem, Secretary of State at the Ministry of Commerce and Fisheries, in a statement to E24.

The Secretary of State points out that “the aviation industry has been and is in a demanding situation.”

– The state contributes, among other things, through adjusted dismissal rules, reduced rates and we have made available a guarantee scheme for aviation. The guarantee scheme is significant, while the state ensures that the risk of loss of community values ​​is not too high, says the secretary of state.

He adds that the state also buys flights from Norwegian, SAS and Widerøe, so a minimum supply of domestic flights can be maintained even during the crisis.

In addition to supporting airlines, the government has also provided billions in support of Avinor, which due to the dramatic drop in air traffic expects to lose between seven and eight billion crowns in business and tax revenue this year.

You will get billions

In the letter of August 28, in which Norwegian requests the meeting, to be held on September 21, it is indicated that the airline wishes to discuss the “liquidity situation [til selskapet, journ.anm..] and the way forward for Norwegian aviation. ‘

This has also been a main topic in previous meetings that the airline has had with the Norwegian authorities and the Minister of Commerce and Industry.

On the same day that Norwegian requested the new meeting with the government, the company also presented the results for the second quarter.

– We have reduced the debt with the company by about 17,000 million in recent months. So we’ve bought time, but we still need more liquidity in the next six to seven months, CFO Geir Karlsen said from the podium.

Even though the company was very clear that they were now working on a new financing package, the company’s management did not say anything specific about how much money they think it should have, or anything about what the package will look like.

In the general meeting convening notice, Norwegian wrote that if the crown crisis, travel restrictions and weak market demand continue until the end of 2020, then “about NOK 2.2 billion will be needed for the second quarter. 2021 “.

– What makes it a bit difficult to say is that some assumptions were used to get that number and you have to look at what the assumptions are now, Karlsen tells E24 after the presentation.

In the quarterly report, the company presented a list of possible ingredients for the new crisis package:

• New financing (loans, journal.anm.)
• Additional issuance of shares in a private placement (fresh capital from equity investors, journal.anm.)
• A reassessment of the company’s business plan and scope of business.
• Sale and refinancing of assets
• or other sources of funding