By Dominic Chopping
Norwegian Air Shuttle ASA said Friday that it plans to publish a detailed plan supporting the future of the company next week, as losses mounted in the fourth quarter amid hefty impairments.
During the quarter, the low-cost carrier filed for protection from creditors in Ireland--a process known as examinership--giving it time to restructure, and proposed a restructuring that will see it cut debt and raise new capital.
Norwegian Air said it is optimistic about concluding the processes successfully, but cautioned that if unsuccessful it is highly likely the company will enter liquidation and/or bankruptcy proceedings during the second quarter of 2021.
As part of its restructuring, the airline plans to reduce its short-haul network and discontinue long-haul operations. The move will see its fleet reduced from 131 aircraft at the end of 2020 to 53 aircraft upon exiting the reconstruction, it said.
As a result, the airline booked impairment losses of 12.82 billion Norwegian kroner ($1.53 billion) in the fourth quarter related to aircraft that will be discontinued as well as predelivery payments on terminated aircraft orders.
The airline reported a net loss of NOK16.63 billion, from a loss of NOK1.87 billion a year earlier.
Revenue fell 93% to NOK669.8 million in the quarter. It carried 574,000 passengers, compared with 7.57 million a year earlier, it said.
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