* Will focus on Nordic and European routes
* Says has resumed talks with government
* Says state could "participate"
(Adds CFO, analysts, ministry reaction, date of next court
hearing)
By Terje Solsvik and Victoria Klesty
OSLO, Jan 14 (Reuters) - Norwegian Air, which
challenged British Airways and other long-established
rivals by launching transatlantic flights, said on Thursday it
will end those services, causing 2,000 job losses, and seek
government help.
The budget airline, founded in 1993, has been forced to
ground all but six of its 138 aircraft due to the pandemic and
will now focus on Nordic and European routes.
"We have decided that long-haul is no longer in our business
plan," CEO Jacob Schram told an online news conference.
The plan also involves closing units in the United States,
Italy, France and Britain, including its base at London Gatwick
airport.
"The brutal reality is that (they) will be declared bankrupt
... 2,000 employees are affected," said Schram.
The airline aims to cut its fleet to about 50 aircraft
before expanding to around 70 in 2022, it said.
The plan must be approved by an Irish bankruptcy court. The
next hearing is on Jan. 22.
Norwegian's 35-strong long-haul fleet of Boeing
Dreamliners - most of which are leased - is now up for
negotiation, finance chief Geir Karlsen told Reuters.
"Overall, this seems like a sensible plan," said brokerage
Davy. "The long-haul business was volatile and generally loss
making since its launch in 2013 – in this environment,
withdrawal is the only viable option."
GOVERNMENT HELP?
Norwegian risks running out of cash by the end of March if
it fails to restructure debt and liabilities of 66.8 billion
crowns ($7.89 billion), including 48.5 billion in
interest-bearing debt, it warned late last year.
It hopes to cut debt to around 20 billion crowns and raise
4-5 billion from new shares and hybrid capital.
The new plan aligns with "signals" from Norwegian
politicians about what would be required for the state to
provide further help, Schram told Reuters.
Sydbank analyst Jacob Pedersen said it was unlikely the
government would take a stake in Norwegian, given its stated
reluctance to do that.
The industry ministry was not immediately available for
comment.
The plan could return Norwegian to profit before interest,
tax, depreciation and amortisation (EBITDA) later this year,
based on conservative assumptions, it said.
However, Bernstein analysts said the planned debt reduction
was too small. "It is more likely in our view, that the current
Norwegian will eventually have to be wound down, and any
continuation of the business will need to be built anew."
($1 = 8.4686 Norwegian crowns)
(Writing by Terje Solsvik and Gwladys Fouche. Editing by Jason
Neely and Mark Potter)