Shareholders saved Norwegian from bankruptcy on Monday. But the crisis for the Norwegian giant risks being far from over, warns aviation expert Jan Ohlsson.
– A lot now depends on how Covid-19 develops and whether people dare to start flying again, he says.
Norwegian appears to be staying afloat. At an extraordinary general meeting on Monday, an overwhelming majority of shareholders voted in favor of the management's crisis plan.
The decision means that the shareholders go from owning 100 percent of the company to 5 percent – and the airline's mountain of debt of just over ten billion Norwegian kroner to creditors is converted into shares.
However, the fact that shareholders have given the green light to the management's rescue plan does not mean that the company's crisis has been averted. According to aviation expert Jan Ohlsson, the corona pandemic risks continuing to hit the Norwegian aviation giant hard.
– No, the crisis is not over. A lot now depends on how Covid-19 develops and whether people dare to start flying again, he says.
Government support package
Just like SAS, Norwegian has a large proportion of flights on the charter side – and the loss of income during the summer is expected to be large, according to Jan Ohlsson. The reason, he believes, is that countries have been out of sync regarding when the borders will open.
– Of course, this is not good for the airlines. It would have been best for them if all countries had opened at the same time, but that is not going to happen.
At a press conference on Monday, Norwegian CEO Jacob Schram said he was relieved, but that much work remains. The airline now hopes to receive a government aid package of 2.7 billion Norwegian kroner in mid-May.
– It may sound like a lot, but it really isn't. The most important thing for Norwegian is that Covid-19 starts to subside and that flights start again, says Jan Ohlsson.
Can I get my money back?
The corona crisis has hit the entire aviation industry hard and thousands of Swedes have had their trips cancelled. But those who bought their trip through Norwegian can now start hoping to receive compensation, says Jan Ohlsson.
– They have promised to pay back. I think they will be quite careful with it and take responsibility. But it will take time.
He also notes that rescuing Norwegian is important to keeping airfares down.
– This is pleasing for Swedish consumers, as it provides a balance in consumer prices for airline tickets. We will be much worse off after Covid-19, so prices simply cannot go through the roof if airlines are to believe they can remain in business.
Source: svt.se
