Norwegian Air has asked the Irish High Court to oversee a restructuring of its massive debt as it seeks to stave off collapse amid the coronavirus pandemic, the airline said.
Norway's government last week rejected the airline's plea for another injection of state funds, and the company said the following day it was at risk of having to halt operations in early 2021 unless it got access to more cash.
Around 100 Norwegian Air staff wearing company uniform demonstrated in front of the parliament building in Oslo earlier to demand more state support for the airline and the rest of the industry.
Growing rapidly to become Europe's third-largest low-cost airline and the biggest foreign carrier serving New York and other major U.S. cities, Norwegian's debt and liabilities stood at $7.4 billion at the end of September.
"Norwegian has chosen an Irish process since its aircraft assets are held in Ireland," the company said in a statement.
"Based on Norwegian's current cash position and the projections going forward, the company believes it has sufficient liquidity to go through the above-mentioned process."
Chief Financial Officer, Geir Karlsen, said the company would meet with creditors and discuss how to reconstruct the debt and fleet so that Norwegian Air comes out of the process in a stronger position. The company's creditors are a mix of leasing firms and banks.
"We have had a good dialogue with all the big creditors since Covid-19 broke out, I don't think this will be a very big surprise," Mr Karlsen said. "We are optimistic that we will get through this and come up with a good solution."
He said the airline still plans to have both short-haul and long-haul service.
Norwegian Air has scaled back its schedules drastically and is now serving domestic routes only, with six of its 140 aircraft flying.
Before the pandemic, Norwegian Air helped transform transatlantic travel, expanding the European budget airline business model to longer-haul destinations, making basic flights cheaper for those prepared to go without frills.
Having lost money each year from 2017 to 2019, and raised new equity from shareholders on three occasions as the company haemorrhaged cash, Norwegian was seen as vulnerable even before the virus outbreak.
Norway granted loans guarantees to the company of 3 billion crowns, but later rejected a second request for funds.
Norwegian's shares were suspended ahead of the announcement. They were trading down 0.3% at the time.