Norwegian mulls end to long-haul

Although Norwegian (DY, Oslo Gardermoen) shareholders backed the troubled carrier’s restructuring plans last week, its creditors have said they are not happy with the legal process’s pace. The airline’s executives have given themselves one month to complete the plans, including deciding the fate of its long-haul operations. As previously reported, Norwegian has obtained the support of its shareholders in an extraordinary general meeting for its restructuring plan, including the issuance of new shares and debt conversion. It expects to produce a precise rescue plan early in 2021, with a probable share issue towards the end of February. The newspaper Dagens Næringsliv put the likely deadline for the plan, in which the company will probably have to decide how many aircraft are involved if it survives bankruptcy protection, on January 22. Sources told the newspaper that some of the airline’s board members had been adamant that a relaunched Norwegian must permanently end unprofitable long-haul operations and instead focus on Norway, the Nordic markets and choice routes in Europe. According to the ch-aviation capacities module, Norwegian currently operates just 19 routes, all of them within Scandinavia. Despite intense speculations on the issue in the local media and among analysts, chief executive Jacob Schram insisted that no decision on the fate of long-haul had yet been made. “I have noticed that there has been a lot of speculation about it. No decision has been made, but it is an important topic which is natural for the board to discuss. It’s not appropriate for us to take a position on it right now, but it is clear that we must take a position on it during the examinership process and it also depends on the interest of investors.” Lars-Daniel Westby, an analyst at Oslo-based Sparebank 1 Markets, told Dagens Næringsliv that he believed Norwegian must know that its long-haul operations cannot continue, stressing: “Norwegian must put a credible business plan to the court in Ireland, and it must convince the court that the plan is profitable.” Through the examinership process, the Irish courts will decide whether Norwegian can undertake its restructuring plans for which it must have evidence of a potentially profitable business plan. However, lessors are seeking more information from Norwegian on its plans to cut its fleet, the Irish Times reported from the High Court of Ireland on December 18. They are waiting for an answer on how many aircraft it will operate in 2021 and 2022.