Oslo (AFP)

Norwegian Air Shuttle shareholders adopted a bailout package on Monday that will give the low-cost airline a breath of fresh air in an airline industry shaken by the health crisis linked to the new coronavirus.

The plan avoids bankruptcy presented as imminent for the third European low cost which was one of the first to put intercontinental links within the reach of all.

He plans to convert more than 10 billion kroner (880 million euros) into debts held by bondholders and leasing companies.

The conversion, which will leave almost nothing to existing shareholders, will be followed by a capital increase, the fourth in just over two years, likely to raise up to 400 million crowns.

Thanks to these operations, the low cost will fulfill the conditions set by the Norwegian government for the granting of guarantees of 2.7 billion crowns, in addition to the 300 million already granted.

Without this lifeline, the company was threatened with bankruptcy.

"Shareholders need to use their voting rights and say yes," Norwegian CEO Jacob Schram said on Sunday. "Otherwise, the fairy tale is over," he added.

Gathered - on a digital platform, requires a pandemic - on Monday in an extraordinary general meeting, the shareholders adopted more than 95% of the different elements of the crisis plan negotiated until the end with the different stakeholders.

Unpublished according to experts, the leasing companies from which Norwegian leases part of its planes have agreed to transform part of the company's debt into capital shares.

The new measures will greatly dilute the existing shareholders, who will only represent around 5% of the round at the end of the process.

- Ravaged sector -

A pioneer in long-distance low cost, Norwegian is paying the price for an ambitious expansion policy that has led to colossal debt even as the new fuel-efficient aircraft on which its economic model was based (Boeing 787 Dreamliner and Boeing 737 MAX) were experiencing multiple setbacks.

Accumulating losses for three years, the company has seen its difficulties worsened by the epidemic of new coronavirus which paralyzes air transport for several weeks.

Almost all of its fleet is today grounded and around 7,650 employees, or 80% of the staff, are partially unemployed.

According to commentators, the breath of fresh air should allow the carrier to survive for several months.

"It is difficult to predict today how air traffic will develop," commented independent analyst Hans Jørgen Elnaes to TV2 Nyhetskanalen. "This new capital will have to last until after the summer and, perhaps, until the end of the year".

The coronavirus pandemic has wreaked havoc in the airline industry, driving down demand.

According to the International Air Transport Association (Iata), world air traffic recorded the largest decline in recent history in March, dropping 52.9% from the same period last year, falling back to 2006 level.

The epidemic notably sounded the death knell for the British regional carrier Flybe and forced the companies to cut their workforce. Last week, British Airways announced the loss of 12,000 jobs, the Scandinavian SAS - head-to-head competition from Norwegian - of 5,000, and Icelandair of 2,000.

For its part, Norwegian says it plans to return to normal operations in 2022 but in a more compact format with fewer long-haul routes and an emphasis on more profitable lines.

The fleet will be reduced to between 110 and 120 aircraft against 168 before the emergence of the coronavirus.

The action jumped about 35% late in the morning on the Oslo Stock Exchange.

© 2020 AFP