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14 Jan 2021 | 19:12

Norwegian Air ditches long-haul routes in boost for rivals

(Sharecast News) - Norwegian Air will ditch its low-cost long-haul routes as part of its plans to exit bankruptcy. The announcement was also made ahead of a cash raising exercise for Skr5bn (£439.8m) through a rights issue and private placement, together with a hybrid instrument.

Instead, the carrier will refocus on what has always been its mainstay, short-haul routes.

Fifty jets would be kept in the air in 2021, rising to 70 during the following year.

News of the company's new strategy lifted shares of its competitors across the board, including Easyjet, IAG, RyanAir, and Wizz Air.

Norwegian was but the latest carrier forced into bankruptcy since the novel coronavirus pandemic started with over 40 having since gone under.

Roughly 2,100 jobs were expected to be lost, 1,100 of them in the UK, including 300 pilots who would be made redundant.

Under the terms of the proposed restructuring plan - which hinged on Oslo's participation - existing shareholders would retain a 5% stake and be allowed to participate in the rights issue, impaired creditors would get a 25% stake and new investors the rest.

Shares of Norwegian ended the session down by 5.195 at Skr73.0.

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