Norwegian Air has said it may run out of cash by mid-May if its creditors and shareholders do not approve the company’s financial rescue plan.
The budget carrier has already grounded 95% of its fleet due to the pandemic. Last week four of its staffing subsidiaries filed for bankruptcy, and it cancelled contracts with a jointly owned firm that provides crew in Spain, UK, Finland, Sweden and the US. The two actions put 4,700 jobs at risk.
Norwegian has proposed a debt-to-equity swap which would hand the majority of control to the company’s lessors. The move would allow it to tap into government guarantees of 2.7bn Norwegian Krone ($255m; £205m), on top of the 300m Krone it has already been granted.
Separate votes will be held on the plan by bondholders, shareholders and leasing firms. If approved, Norwegian could potentially ground its fleet until April 2021, aside from a handful of aircraft currently flying in Scandinavia.