Budget carrier Norwegian Air said it still expects to return to profit this year, but it failed to reassure investors who sent its share price tumbling again on concerns the coronavirus would hurt passenger numbers.
Shares in the airline, which has had to raise cash from its owners to survive, slumped 15.9% to an 11-year low earlier today.
They have now lost 46% since the start of this week as the coronavirus has spread around the world.
Norwegian Air said on February 13, when it presented quarterly results, that it expected to report a profit in 2020 after three consecutive years of losses.
“As of today, the company maintains the guidance and outlook presented in relation to the Q4 reporting on 13 February. The company is monitoring the market situation on a regular basis,” Norwegian said.
It said it put out the statement in response to “market speculation” and subsequent inquiries from shareholders.
A pioneer in low-fare transatlantic air travel, Norwegian Air’s rapid expansion has left the company in the red and heavily in debt, forcing it to cut unprofitable routes.
Late last year the airline raised cash from its owners for the third time in less than two years and also issued convertible bonds to help shore up its finances.
The bonds have so-called covenants linked to the finances of a key subsidiary, Arctic Aviation Assets (AAA), which must keep its book equity and debt levels within certain minimum levels.
If covenants are broken, this could in turn lead to another round of debt and equity restructuring, but the company sought to dispell any such worries.
“Following 31 December 2019, there has been no change in AAA that would result in a material change that would impact the covenants,” Norwegian said.