Norwegian Air updates offer to creditors in key step towards survival

Norwegian Air has presented an updated restructuring proposal to creditors in a major step in its plan to slash debt and reduce its fleet to survive the coronavirus pandemic.

If approved by enough creditors and the Irish High Court, the so-called scheme of arrangement is expected to enable Norwegian to raise new capital and allow it to emerge next month from court-provided bankruptcy protection.

"This is an important milestone in the process of securing Norwegian's future," chief executive Jacob Schram said.

Financed largely by debt, Norwegian had grown rapidly to become a major carrier by the time of the Covid-19 outbreak. The survival plan puts a definitive end to its long-haul business, leaving a slimmed-down airline focusing on Nordic and European routes.

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The updated proposal followed an outline first given by Norwegian in January to cut its fleet to 53 jets from 140 before the pandemic and slash its debt to 20 billion Norwegian crowns (€2 billion) from 56 billion. The airline must raise 4 billion-5 billion crowns from new shares and hybrid capital, of which Norway’s government has said it is willing to contribute 1.5 billion.