Norwegian Air to raise additional $711 million before bankruptcy exit

OSLO: Norwegian Air now aims to raise up to 6 billion crowns ($711 million) in fresh capital, up from a planned 4.5 billion, to bolster its resources before emerging from bankruptcy protection next month as the pandemic continues to curb travel.

Financed largely by debt, Norwegian Air grew rapidly, serving routes across Europe and flying to North and South America, Southeast Asia and the Middle East before the COVID19 pandemic plunged the airline into crisis.

“We want to take a conservative approach at a time when the pandemic and travel restrictions continue to create unpredictability in the travel sector,” Chief

Executive Jacob Schram said in a statement on Wednesday.

Courts in Oslo and Dublin have recently given their approval for Norwegian to sharply cut its debt by converting it to stock, but the rulings were conditional on the airline raising at least 4.5 billion crowns in additional funds,

Reuters reported.

The survival plan brings an end to Norwegian’s long-haul business, leaving a slimmeddown carrier focusing on Nordic and European routes, but the ongoing spread of the virus continues to hamper the industry.

“We must take this uncertainty into account in our forward planning strategy. At the same time, we have also taken into consideration feedback from investors, as well as dialogue with our board,” Schram said. Norwegian said certain investors had agreed to inject 2.86 billion crowns via a share issue, and that current creditors were expected to buy new perpetual bonds worth at least 1.8 billion.

Norway’s government has separately said it is willing to invest 1.5 billion crowns in hybrid capital. Norwegian Air faces increased competition at home, not only from SAS and Wideroe, but also new start-up Flyr which is expected to launch its first flight in Norway by mid-year.

WASHINGTON: American Airlines said on Wednesday it expects to fly more than 90 per cent of its domestic seat capacity in the summer of 2021, compared with the same period in 2019, due to a strong rebound in bookings.

The U.S. airline also expects to utilize 80 per cent of its international seat capacity this summer, compared with 2019 levels.

Air travel has been impacted by travel restrictions around the world due to the COVID-19 pandemic, however, rising vaccination rates are widely expected to aid bookings later this year, Reuters reported.

American said it plans to operate more than 150 new routes this summer, as people increasingly travel for leisure.

“Today, (customers) are telling us they’re eager to get back to travel,” said Brian Znotins, American’s vice president of network planning, in a statement. Shares of American were up 1.5 per cent at $22.94 in premarket trading.