World News

Norway holds talks with Norwegian Air after call for help, share price rises 29%

By Victoria Klesty and Gwladys Fouche

OSLO (Reuters) – Norway’s government held talks with Norwegian Air executives on Wednesday after the struggling airline called for financial backing similar to that given to regional rival SAS by Denmark and Sweden.

Norwegian’s battered shares closed up 29% as pressure mounted on Oslo to step in after Copenhagen and Stockholm offered SAS a total of 3 billion Swedish crowns ($302 million) in credit guarantees late on Tuesday.

“We had a constructive meeting during which we were clear that we wanted a credit facility,” company Chief Executive Jacob Schram said in an email to Reuters after the talks on Wednesday.

There was no immediate news after the meeting of any concrete plan to rescue the airline, a pioneer in transatlantic budget travel since 2013.

“Today I and industry minister Iselin Nyboe had a video meeting with (union) Parat and Norwegian when they asked for it,” Transport Minister Knut Arild Hareide said in an email to Reuters.

The carrier has announced temporary layoffs of 90% of its staff as the coronavirus outbreak brought global aviation to a near standstill.

Australia and Taiwan have joined governments offering financial aid to airlines, while the Italian government stepped in again to keep Alitalia in business.

Norway’s minority center-right government has introduced a range of economic measures to help companies, but airlines have called for stronger action for their industry.

“It is important for us that it is infrastructure and jobs that are saved, not shareholders,” Unn Kristin Olsen, leader of Parat whose members include airline employees, told public broadcaster NRK after it was concluded.

Norwegian was battling to turn around its fortunes before the coronavirus hammered the industry.

Having lost money each year from 2017 to 2019 and raised cash from shareholders on three occasions, debts and liabilities had grown to 82 billion Norwegian crowns ($7.9 billion) by the end of last year.

(Editing by Alexander Smith, Keith Weir and Nick Macfie)