Norwegian airline plunges 22 per cent
Covid-19 continues to trouble carriers
Norwegian airlines’ share price has continued its significant plunge. It fell 22.78 per cent by afternoon trading to stand at NKr12.24 (£1.01, €1.17), as the Covid-19 virus continues to take its toll on travel firms.
Europe’s third-largest budget airline has struggled in recent years and resorted to selling off aircraft, changing both its chairman and CEO, closing down routes and restructuring maturing bonds in order to remain competitive. This was somewhat successful and Norwegian began 2020 in fine fettle with analysts increasingly viewing it as undervalued.
However, such efforts now appear to have been in vain due to the coronavirus hitting the industry throughout the continent. Shares in the airline have now fallen more than 70 per cent in the past month.
On average airlines are thought to have had around 25 per cent wiped off their market value since the outbreak began in Wuhan, China. The International Air Transport Association (IATA) has estimated that passenger airlines could lose up to $113bn in revenue this year, a marked increase from the $29bn it had previously predicted.
Norwegian’s latest plunge comes a day after Flybe, Europe’s largest regional airline, collapsed. It is by no means certain that Norwegian will follow in Flybe’s footsteps yet it is equally not impossible. At the end of the 2019 financial year the airline only had NKr3.1bn in cash on its balance sheet. This year it is set to repay NKr600m in debt and take delivery of two Boeing Dreamliners, at the same time as demand falls due to the coronavirus.
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