Norwegian staffing companies file for bankruptcy

Norwegian Air has announced that four subsidiary companies supplying it with pilots and cabin crew in Sweden and Denmark have filed for bankruptcy.

The move puts nearly 5,000 jobs at risk, as Norwegian grapples with the impact of coronavirus on the airline industry.

The firm has already cut 85% of its operations, and grounded all but 11 planes in its fleet of 160.

Norwegian Pilot Services Sweden AB, Norwegian Pilot Services Denmark ApS, Norwegian Cabin Services Denmark ApS, and Norwegian Air Resources Denmark LH ApS are the firms that filed for bankruptcy, the airline said in a statement.

The carrier blamed the varied approaches to the coronavirus crisis among the Scandinavian governments. In Norway, it said, there are “efficient furlough opportunities, which means that the government pays for all salary-related costs throughout the duration of the furlough period,” but “there is not the equivalent coverage in Sweden or Denmark.”

Norwegian said it had also notified Norway-based OSM Aviation – which is half-owned by Norwegian and manages the crews in Finland, Spain, Sweden, the UK, and the US – that all crew provision agreements with it had been cancelled.

In total, the move will affect exactly 1,571 pilots and 3,134 cabin crew, the statement said, adding that around 700 pilots and 1,300 cabin crew in Norway, France, and Italy are not affected.

“The impact coronavirus has had on the aviation industry is unprecedented. We have done everything we can to avoid taking this last resort, and we have requested access to government support in both Sweden and Denmark,” said Norwegian CEO Jacob Schram. “It is heartbreaking that our Swedish and Danish pilot and cabin crew subsidiaries are now forced to file for bankruptcy […]. We work around the clock to get through this crisis to return as a stronger Norwegian with the goal of bringing as many colleagues back into the air as possible.”

On April 15, British media reported that around 1,000 pilots and cabin crew employed by Norwegian UK (DI, London Gatwick) had received a letter saying they would not receive their salaries for April as the airline had “no readily available funds to pay any employees on this coming payday” on April 25.

The letter was sent by OSM Aviation UK. OSM said it aimed to apply for the UK government’s furlough scheme to cover 80% of staff wages up to GBP2,500 pounds (USD2,715) when the scheme opened on April 20, adding that “an optimistic pay date” would be May 1 if the furlough funds arrived but could also be as late as mid-May.

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