Norwegian Air emerged from six months of bankruptcy protection today with a smaller fleet and its debt almost wiped out but also facing stronger competition and lingering uncertainty wrought by the pandemic.
The airline said last week that it had raised 6 billion Norwegian crowns ($721m) in fresh capital, as planned.
This was more than enough to meet the minimum requirement set by bankruptcy courts in Dublin and Oslo.
"We have saved an airline that is of huge value to Norway and which binds our long country together," chief executive Jacob Schram told a news conference.
"We're back!" read a large banner outside the company's headquarters to mark the occasion, while Schram hoisted a flag with Norwegian Air's red, white and blue logo.
The Covid-19 pandemic threw already heavily indebted Norwegian into a crisis in early 2020, eventually forcing it to terminate large parts of its operations, including its transatlantic network.
The company now has 51 aircraft, down from a pre-pandemic 156, while its debt amounts to between 16 billion and 18 billion Norwegian crowns, down from more than 80 billion, it said.
But adding to competition from old rivals SAS and Wideroe, Hungary's Wizz Air has established several services to Norwegian cities in the last year.
Ryanair has also opened more routes out of the Nordics and a new Norwegian start-up, Flyr, is expected to launch its first domestic flight by mid-year.
"We said that we wanted to get in enough (cash) so that we would be sure that, in a year from now, almost regardless of what happens with COVID-19, we'd still be in a good position," the airline's chief financial officer Geir Karlsen said.
Under the terms of the restructuring, a flexible leasing agreement will limit cash burn.
Norwegian will in the next 10 months only pay leasing costs for the aircraft it actually uses at any given time, so-called 'Power by the Hour' agreements, which provide financial flexibility amid uncertain demand.
"Since March last year, the pandemic has parked the global airlines industry, and no industry survives very long without customers," Schram said.
Meanwhile, more customers are booking flights with Norwegian Air for the upcoming summer season in Europe, although pandemic restrictions still weigh on demand, the carrier's CEO told Reuters.
"There is a clear rising trend, it won't be the kind of summer we had in 2019, but it is a rising trend," chief executive Jacob Schram told Reuters at the company's headquarters on the outskirts of Oslo.
"The most important thing will be how governments choose to open up society. The demand is there, we can see that on the bookings, people are aching to travel," Schram said.
Allowing travellers to reschedule journeys is a key measure to help regain confidence, he added.
"I think all airlines are looking at how they can reassure the customers in relation to giving greater flexibility," Schram said.