Norwegian Air, SAS and Norway’s short-haul airline Widerøe have all requested the Norwegian authorities to cowl the misplaced revenues for each this yr and subsequent yr. Mortgage ensures aren’t sufficient, they declare, to bail them out of the Corona virus disaster.
“With such a bad summer as we’ve had this year, we don’t have the financial muscle to get through the winter,” Norwegian Air’s chief govt, Jacob Schram, advised the newspaper Dagens Næringsliv after a gathering with prime officers from the affected authorities ministries. “We need all the help we can get”, Schram concluded in what resembled a plea for help.
The troubled airways are anticipated to collectively lose 27 million passengers and NOK 27 billion ($three billion) in revenues in 2020 and 2021. Whereas extreme cost-cutting and different austerity measures might cowl about half of the sum, the businesses nonetheless want additional reduction of round NOK 13.5 billion ($1.5 billion).
The reduction might are available varied kinds, corresponding to tax exemptions, extra mortgage ensures and even money transfers from the federal government. Commerce Minister Iselin Nybø has up to now remained undecided on the type of help, together with the potential of the state turning into a shareholder.
“The state has been a shareholder in SAS and chose to sell off its stake before this situation came up”, Nybø mentioned. “I don’t want to rule anything out, nor do I want to create any great expectations.”
SAS had been hoping earlier for the Norwegian authorities to re-join Sweden and Denmark as a shareholder within the Scandinavian flag service, however that didn’t occur.
In the meantime, pundits have forecast a serious overhaul of the Scandinavian airline trade amid the continuing COVID-19 disaster, that has considerably modified journey patterns.
Bitter rivals Norwegian and SAS have finally ended up in the identical boat. Regardless of their lockdowns being lengthy over, each Norwegian and SAS have only some planes within the air they usually have many empty seats. The businesses’ newest August report is just not a cheerful learn.
In August, solely 313,000 folks flew with Norwegian, which is lower than a tenth of what they’d in the identical month final yr. SAS had virtually 700,000. Whereas that is practically twice as many, nonetheless three out of 4 passengers have dropped out, in contrast with the identical interval final yr. As well as, passengers now fly a lot shorter distances.
Based on varied forecasts, flying won’t grow to be regular once more earlier than 2022. Even then, it could take one other yr to completely return to pre-crisis ranges. Whereas the passengers’ insecurity and reluctance to fly is just not uniquely Scandinavian, the Nordic market might face drastic adjustments.
With Norwegian, a low-cost enterprise, teetering on the breaking point, the flagship service SAS might get sufficient cash to climate out the storm and drive its competitor out of the market.
Norwegian was dealing with chapter earlier this yr, however was bailed out on the final minute when each the Norwegian authorities and lenders got here in with help. Norwegian’s large intercontinental enlargement plan final yr ended up leaving the airline with troubled plane from Seattle-based Boeing and large debt, which can render additional assist unlikely.
“Norwegian has six to nine very difficult months ahead of it. I’m not sure the Norwegian government wants to save them again and there is hardly any other airline that can afford to buy them. The exception is Ryanair, but it is unlikely,” Sydbank analyst and aviation trade specialist Jacob Pedersen advised the newspaper Svenska Dagbladet.
Based on him, a slightly turbulent interval might ensue for Scandinavian air travellers. If Norwegian disappears, SAS would dominate the market, a minimum of for a short while.
“But if that happens, several low-cost companies will invest more in Scandinavia. This applies above all to Ryanair and Easyjet,” Jacob Pedersen mentioned, stressing that it bodes a fair more durable competitors for SAS.
In the meantime, SAS has pink-slipped 5,000 workers, virtually half of its employees, and is negotiating 15-25 % wage reductions.