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Due to the ongoing spread of the Coronavirus (COVID-19) most countries have advised against or have banned non-essential travel. The closure of borders and quarantine restrictions have effectively brought the entire airline industry to a halt. Consequently, almost all of Norwegian’s flight operations have been cancelled, while the costs for air crew remain.
Norwegian has a slightly complicated corporate structure, where different pools of pilots and cabin crew are employed by different subsidiaries of the Norwegian Group.
Unfortunately, despite the measures that Norwegian has taken to reduce costs, the Boards of some of these subsidiaries have been left with no choice but to apply for bankruptcy.
The decisions about filing for bankruptcies in the four crew subsidiaries were made by the respective boards on Monday April 20, 2020.
The impact the Coronavirus has had on the airline industry is unprecedented. We have done everything we can to avoid making this last-resort decision and we have asked for access to government support in both Sweden and Denmark.
Our pilots and cabin crew are the core of our business and they have done a fantastic job for many years. It is heart-breaking that our Swedish and Danish pilot and cabin crew subsidiaries now are forced to file for bankruptcy, and I’m truly sorry for the consequences this will have for our colleagues. We are working around the clock to get through this crisis and to return as a stronger Norwegian with the goal of bringing as many colleagues back in the air as possible
CEO of Norwegian, Jacob Schram
In Norway, there are efficient furlough opportunities which means that the government pays for all salary related costs throughout the duration of the furlough period. Unfortunately, there is not the equivalent coverage in the Swedish or Danish schemes.
The Boards of the below companies in the Norwegian Group today Monday 20 April have filed for bankruptcy:
- Norwegian Pilot Services Sweden AB
- Norwegian Pilot Services Denmark ApS
- Norwegian Cabin Services Denmark ApS
- Norwegian Air Resources Denmark LH ApS
UK and USA crew will also be impacted
Due to the extraordinary situation, Norwegian has also notified its partner OSM Aviation that it has cancelled the crew provision agreements with several of its jointly owned OSM Aviation subsidiaries. These companies have crew based in Spain, UK, Finland, Sweden and the US.
The above actions will, in total, affect 1,571 pilots and 3,134 cabin crew. About 700 pilots and 1,300 cabin crew based in Norway, France and Italy are not affected.
The process of the subsidiaries filing for bankruptcy is now being managed by bankruptcy courts and bankruptcy trustees in the respective countries.