Four subsidiaries that employ cabin crew and pilots for Norwegian Group have applied for bankruptcy due to Covid-19-related financial distress, the company said Monday. The subsidiaries, one incorporated in Sweden and three in Denmark, employ 1,571 pilots and 3,134 cabin crew based Spain, the UK, Finland, Sweden, and the U.S. The decisions—all made by the respective subsidiaries’ boards on Monday—do not affect about 700 pilots and 1,300 cabin crew based in Norway, France, and Italy.
“We have done everything we can to avoid making this last-resort decision and we have asked for access to government support in both Sweden and Denmark.” said Norwegian CEO Jacob Schram. “Our pilots and cabin crew are the core of our business and they have done a fantastic job for many years. It is heart-breaking that our Swedish and Danish pilot and cabin crew subsidiaries now are forced to file for bankruptcy, and I’m truly sorry for the consequences this will have for our colleagues. We are working around the clock to get through this crisis and to return as a stronger Norwegian with the goal of bringing as many colleagues back in the air as possible,”
Norwegian said it has canceled almost all its flight operations, about a month after it said it would cut 85 percent of its flights and lay off 7,300 employees—or 90 percent of its workforce.
In Norway, the government pays for all salary-related costs throughout the duration of the furlough period, meaning enough furlough opportunities exist there, said Norwegian. Sweden and Denmark do not offer such coverage.
“Despite the measures that the company has already taken, coupled with the lack of significant financial support from the Swedish and Danish governments, we are left with no choice,” Norwegian said in a statement.
Separately, Norwegian invoked force majeure provisions in its contract with OSM Aviation to cancel several crew agreements. Those will affect staff in Spain, the UK, Finland, Sweden, and the U.S.