UPDATE 1-Struggling Norwegian Air launches shares issue, bond

(Adds comments from statement, details of deals)

By Gwladys Fouche and Terje Solsvik

OSLO, Nov 5 (Reuters) - Norwegian Air is planning a
share issue and a $175 million bond, raising enough cash to meet
the struggling budget airline's needs through 2020 and beyond,
it said on Tuesday.

The share issue will be its third in less than two years.

With mounting debts and suffering from the grounding of its
18 Boeing 737 MAX aircraft, Norwegian has this year
replaced breakneck expansion with cost cutting in a bid to
regain profitability.

"After the completion of the transactions, Norwegian is
fully funded through 2020 and beyond based on the current
business plan," Europe's third-largest budget airline by
passenger numbers said in a statement.

It said it was considering a private placement of up to
27.25 million new shares and a bond issue of up to $175 million.

The deals together could raise close to 2.9 billion
Norwegian crowns ($316 million) if the shares are sold at
current market prices, a Reuters calculation showed, although
the company might have to sell at a discount.

"The proceeds ... will secure required financing of working
capital during the winter season and create headroom to
financial covenants while completing the strategic
transformation of the company," it said.

The airline also reported October traffic figures on
Tuesday, before the scheduled release on Wednesday.

Passenger traffic declined in October from a year ago, its
monthly report showed, the first such fall on record as the
carrier cut loss-making routes from its network.

Overall traffic, a measure of distance flown and the number
of people carried (RPK), fell 3% year on year in October, the
company said. Analysts in a Reuters poll on average had expected
a fall of 12.1%.

($1 = 9.1875 Norwegian crowns)
(Reporting by Terje Solsvik and Gwladys Fouche; Editing by
Edmund Blair)