Norwegian Air's passenger volume fell by 60% year-on-year in March as it grounded planes amid efforts to halt the spread of COVID-19, and the airline will book a hedging loss of $102 million as the cost of fuel has plunged.
A pioneer in low-fare transatlantic air travel, Norwegian's rapid expansion has left it heavily in debt. It has repeatedly raised cash from shareholders in order to stay in business, and its Oslo-listed shares have plunged 78% so far this year.
"The company experienced a dramatic drop in demand following government-imposed travel restrictions and a general travel decline," the carrier said in relation to its March numbers, adding that its capacity had been 40% lower than originally planned.
Norwegian has said that it will cancel 85% of its flights and furlough 90% of staff while seeking financial aid from Norway's government.
Last month, the company also said that it would start talks with creditors on postponing payments in order to qualify for a government rescue package requiring, among other things, that debt repayments must be put on hold for the time being.
The group said that it estimates losses on fuel hedging positions of 1.07 billion Norwegian crowns ($102 million). Last week, Europe's largest budget carrier, Ryanair, one of the few others to date that have disclosed its fuel hedging losses, said that it will book a charge of €300 million.
"We will provide further financial and business updates to the Oslo Bourse when it is appropriate to do so," CEO Jacob Schram said in a statement.
Scrapped Return-To-Profit Goal
Before the outbreak of COVID-19 in Europe, Norwegian Air had set a goal of returning to profit this year after three years of losses. That goal was scrapped early last month, however, and Schram said on March 13 that the company needed access to cash liquidity "within weeks, not months."