One of Europe's biggest low-cost airlines fights for its life

One of Europe's biggest low-cost airlines fights for its life

Norwegian Air, Europe's third-largest low-cost carrier, is seeking a lifeline from bondholders as it grapples with a cash crunch.

It has asked for two more years to repay its largest outstanding bonds, worth $380 million, and is putting up its lucrative landing slots at London's second busiest airport as collateral. "They are managing the crisis as best they can but they are on the verge of a cliff edge," Bernstein analyst Daniel Roeska told CNN Business.

Norwegian Air has grown rapidly. In 2012, as it prepared to take on the big players in the transatlantic market, it placed an order for 222 aircraft, the biggest in European aviation history. But this aggressive expansion left it with high levels of debt, which means it has little room to move if things go wrong.

And plenty has gone wrong. Norwegian Air had to halt flights between Ireland and North America starting on September 15 because of the grounding of all 18 of its Boeing 737 MAX aircraft.

The airline's stock has plunged by 65% this year. And in July, CEO and founder Bjoern Kjos, the company's largest shareholder, stepped down. It is still looking for a permanent replacement. Payment delays from credit card companies reduced its working capital by some 4 billion Norwegian kroner ($439 million) in the second quarter of 2019, compared to the same period last year, Norwegian Air said on Monday.

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