Norwegian's pilot and cabin crew companies in Sweden and Denmark are filing for bankruptcy, according to a press release from the airline.
The subsidiaries filing for bankruptcy and the terminated crew service contracts affect a total of 1,571 pilots and 3,134 cabin crew in Sweden, Denmark, Finland, Spain, the UK and the US. Approximately 700 pilots and 1,300 cabin crew based in Norway, France and Italy are not affected.
The effects of the coronavirus have has meant that the conditions for being able to travel have basically disappeared and for Norwegian N This means that almost all flight operations have ceased, while large personnel costs remain. The pilots and cabin crew are mainly employed by various subsidiaries in the Norwegian Group.
”"Despite all the measures the company has taken to reduce costs, unfortunately there is no other option left for the board of directors of these companies than to file for bankruptcy," the airline writes.
The bankruptcy decisions for Norwegian's four subsidiaries – Pilot Services Sweden, Norwegian Pilot Services Denmark, Norwegian Cabin Services Denmark and Norwegian Air Resources Denmark – were made by the companies' boards of directors on Monday. In the company's home market of Norway, there are layoff options that mean the state covers the salary costs during the layoff. However, the corresponding option is not available in Sweden and Denmark, which means that costs remain even if pilots and cabin crew are not working, Norwegian points out.
”"Like our competitors, we have asked for state support in both Sweden and Denmark. The first formal application to Swedish authorities was sent a month ago but there have still been no concrete proposals for liquidity measures. We do not have time to wait as the company is in an acute crisis," the airline writes.
As the need for pilots and cabin crew is now almost non-existent, Norwegian has also terminated its contracts with OSM Aviation and Rishworth, which supply crew services to Norwegian. These companies have flying personnel in Sweden, Spain, England, Finland and the USA.
The handling of affected subsidiaries that file for bankruptcy will now be a matter for bankruptcy courts and bankruptcy trustees in each country. Norwegian CEO Jacob Schram will hold a press conference at 3:00 PM today.
Source: di.se
