Norwegian Air Requests More Time to Pay Off Remaining Bonds

Norwegian Air is asking bondholders for as much as two more years to pay back $380 million of the outstanding amount, in the loss-making airline’s newest attempt to boost its finances.

Norwegian Air is Europe’s third-largest airline by the number of passengers after Ryanair and easyJet and has shaken up the industry with cut-price transatlantic fares. However, its fast expansion has left it with hefty losses and high debt.

It was forced to lift 3 billion Norwegian crowns ($335 million) from equity investors this year and said Monday its working capital had decreased in 2019, partly due to tighter business rules on advance ticket payments.

It further stated the worldwide grounding of Boeing’s 737 MAX plane was lasting longer than expected, dealing another hit to its finances. Norwegian has 18 of the aircraft.

The corporate’s bonds, which mature in December 2019 and August 2020, will be extended to November 2021 and February 2022 if bondholders settle for the revised terms. A bondholders’ meeting will be held on Sept. 16.

Co-founder Bjoern Kjos handed over CEO’s responsibility in July in a step some analysts stated could make it simpler to sell the airline after discussions about a contract with British Airways parent IAG came through in January.

Shares in IAG, as well as those of Ryanair and Wizz Air, climbed Monday on speculation there could be more consolidation in a market that has for months struggled with overcapacity, traders stated.

In May, Ryanair boss Michael O’Leary foretold four or five European airlines were likely to emerge as market winners.

By Luann Reagan

Luann Reagan is a freelance journalist with 18 years of combined experience in the news, communications, copywriting, and marketing. For over a decade, she served as editor for a few local newspapers and has also written for the Associated Press. As a self-proclaimed Tech Evangelist, Luann especially enjoys writing articles for Aerospace & Defence Talks. Currently, Luann contributes articles on overall industry updates.

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