‘A slap in the face’: Norwegian Air plunges after Oslo says no to more funding relief

November 9, 2020, 10:58 AM UTC

Norwegian Air Shuttle ASA said it’s facing “a very uncertain future,” sending the stock plunging, after Norway ruled out providing financial support to a carrier that’s fighting to survive as the coronavirus crisis roils global travel markets.

The government in Oslo said Monday that it won’t be providing special package funding to Norwegian despite a request for a second multi-billion krone aid package, having decided that it wouldn’t be a sound use of community funds. The shares fell as much as 24%.

“The fact that our government has decided to refrain from providing Norwegian with further financial support is very disappointing and feels like a slap in the face,” Chief Executive Officer Jacob Schram said, adding that the carrier employs 2,300 people in Norway and operates many vital routes there.

Norwegian was forced to hand over almost all equity to creditors in May in order to access a state loan worth 3 billion kroner ($330 million). Since then, a revival of operations in Europe has been stymied as countries implement a new wave of Covid-19 curbs, while the North Atlantic market the airline also serves remains largely closed.

The discount carrier, which was struggling even before the pandemic, was forced to ground virtually its entire fleet as well as furlough or outright eliminate 8,000 employees, representing 80% of its workforce.

Shares of Norwegian Air were trading 23% lower as of 9:14 a.m. in Oslo, taking the decline this year to 99% and valuing the company at 1.85 billion kroner.

Norway said it will make funds available to support domestic flights.