Norwegian Air gets backing for survival plan

Norway has backed Norwegian Air's survival plan.

The country's Industry Minister said Thursday (January 21) the government has no intention of being a shareholder - but would stump up cash if private investors did too.

The heavily indebted budget carrier has been forced to ground all but six of its 138 aircraft due to the health crisis.

It asked the government for help last week.

That was after Norwegian was granted bankruptcy protection by courts in Ireland and Norway last year.

It's seeking to shed much of its debt and plans to end its long-haul service.

On Thursday the airline said in a statement: "The government's support significantly increases our chances of raising new capital and getting us through the reconstruction process,".

Norwegian's share price, which has plunged 98% in the last 12 months, was up 14% on the news.

But the government says its participation, in the form of a hybrid loan, will be dependent on private investors taking part in a planned share issue.

If its reconstruction succeeds, Norwegian has said it will initially cut its fleet to about 50 aircraft.

It said that could grow to 70 aircraft in 2022, depending on demand and future travel restrictions.