News: Norwegian raising additional finance
Norwegian Air is to raise NOK 3bn (£268m) via a rights issue. The budget carrier's preliminary earnings statement also point to it making losses of NOK3.8bn for the 2018 financial year, and the firm is taking measures aimed at improving its financial position.
Norwegian plans to take delivery of five Boeing 787s this year despite making cutbacks to its short haul fleet. (Juraj Patekar)
Chief executive Bjorn Kjos said that the strategic focus would change from growth to profitability during the coming year. The carrier's route network has already been trimmed once this year with the announcement on January 7 that crew bases in Spain, Italy and the USA would close. The latest round of changes aim to reduce costs by as much as NOK2.0bn during the coming year, as well as selling aircraft and deferring deliveries. Kjos has confirmed that Norwegian will take five additional Boeing 787-9 Dreamliners this year and another five next in 2020, but then its long-haul expansion plans will be completed. The firm also has a substantial backlog of Boeing 737-MAX and Airbus A321 orders.
On January 24, International Airlines Group (IAG - parent of British Airways, Iberia and Aer Lingus) announced that it was no longer interested in acquiring Norwegian, having previously amassed almost 4% of the shares and having made two takeover offers. Norwegian has since countered that it is open to "engage in consolidation discussions" with other carriers. Norwegian's shares fell almost 30% in early trading but have rebounded but are currently still 12% down. Flights are unaffected.
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