Norwegian Air, Europe’s third largest low-cost-carrier (LCC) received a financial reprieve Monday when it was announced that bondholders had agreed to extend the maturity of two unsecured bonds valued at $380M.
According to a Norwegian Air Press Release, Bondholders overwhelmingly supported the extension of the maturity of their NAS07 and NAS08 unsecured bonds by up to two years. In exchange, Norwegian pledged valuable landing slots at London-Gatwick as collateral. Norwegian’s rapid expansion left the company heavily indebted, but they are now focusing on profitability over expansion. In the announcement, acting Norwegian CEO Geir Karlsen stated,
“We’re pleased with the bondholders’ decision to amend the bonds as it will give us added financial headroom going forward. We believe it demonstrates faith in our strategy and support of the important measures Norwegian is undertaking to return to profitability. The company’s operational performance continues to improve, and we are on track to reach the targeted cost-reductions of two billion NOK [Norwegian Kroner] in 2019.”
Norwegian’s young fleet consists of around 170 aircraft with an average age of 3.8 years. The company operates an all Boeing fleet consisting of 36 B-787 Dreamliner’s, 118 B-737-800’s and 18 B-737 Max 8’s. In addition to their heavy debt load, Norwegian has suffered financially and operationally since the worldwide grounding of the long-haul Boeing 737 Max last March. Norwegian introduced transatlantic LCC service from London-Gatwick in 2014 and currently flies to 12 US gateways, Buenos Aires and Rio de Janeiro.
Source: Norwegian Air