Jan. 21—OSLO — Norway-based budget airline Norwegian Air welcomed a government announcement on Thursday expressing it was willing to support the struggling carrier with new capital, if private investors follow suit.
The move "significantly increases" the airline's possibilities of pulling through the crisis that has hit aviation during the coronavirus pandemic, chief executive Jacob Schram said in a statement.
"We still have a lot of work ahead of us, but a participation from the government underscores that we are heading in the right direction," he added.
A week ago, Norwegian said it planned to drop its long-distance routes and focus on destinations in Norway and Europe according to a revised business plan.
Trade and Industry Minister Iselin Nybo said the new business plan appeared "more robust" than a previous plan the government rejected in October. She noted that the new plan also included a strong reduction of debt.
Prerequisites for the government to support the airline included that Norwegian secured new capital of at least 4.5 billion kroner (532 million dollars), mainly from institutional and strategic investors, a statement read.
Other terms were that the hybrid loan — a type of loan that can be converted into stock — would be given at commercial terms, and Norwegian would also need approval for its restructuring plan.
Nybo did not spell out the size of a possible government loan, but underlined that the state had no plans to be a co-owner of the airline.
Norwegian Air shares rose in early trading on the Oslo stock exhange.
The airline in December secured approval from courts in Norway and Ireland to undergo reconstruction.
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