One of the airlines that struggled prior to the outbreak of COVID-19, Norwegian Air Shuttle, was forced to close down four subsidiary companies on April 20, 2020, as almost all of Norwegian’s flight operations have been canceled.
The Oslo-based airline had four subsidiary companies in Denmark and Sweden, where the low-cost carrier employed pilots and cabin crew members. Despite Norwegian’s best efforts to reduce costs, the companies have all filed for bankruptcy on April 20, 2020.
“The Board of these companies are left with no choice but to apply for bankruptcy,” was outlined in the company’s press release.
The airline said its decision was, among other reasons, enforced by the “lack of significant financial support from the Swedish and Danish governments.” The Norwegian government has guaranteed support for the airline if it met certain requirements. On March 24, 2020, the company fulfilled the initial requirements and received the first installment of $27.4 million (NOK 300 million).
The Chief Executive Officer of Norwegian Jacob Schram stated that the impact of the outbreak is “unprecedented,” and the company did everything to “avoid making this last-resort decision” to close down the four companies.
Furthermore, the airline reasoned a force majeure event to cancel crew provision agreements with a crew management company, which had crews based in Finland, Spain, Sweden, United Kingdom and the United States.
In total, the aforementioned decisions will affect 1,571 pilots and 3,134 cabin crew. The airline also employs 700 pilots and 1,300 cabin crew in Norway, France and Italy, who are currently not affected by the decision.