Shareholders of struggling low-cost airline Norwegian Air Shuttle on Thursday backed a rescue plan that includes debt conversion, a new share issue and reduction of the fleet.

Hit hard by the COVID-19 pandemic’s impact on travel, having already been in financial trouble before, Norwegian recently applied for bankruptcy protection in both Ireland and Norway, in order to buy time to work out a solution with its creditors.

In early December, the company’s management presented a plan to stay afloat involving a large-scale conversion of debt into equity, a new rights issue to raise up to four billion Norwegian kroner (€381 million), and the selling of an unspecified number of aircraft.

During an extraordinary general meeting on Thursday, shareholders overwhelmingly agreed to back the plan, granting management the mandate to begin negotiations with creditors.

The company, a pioneer in the low-cost long haul sector, has been in the red since 2017 and its debt amounted to 48.5 billion kroner at the end of September, in part the result of major expansion by the company.

Just six of the 140 aircraft it had in service at the start of the year are still flying, on Norwegian domestic routes, while only 600 employees among a formerly 10,000-strong payroll are still at work.

Shares in Norwegian over the past year have lost 98 per cent of their value

Shares in Norwegian were up over 10 per cent after lunch on the Oslo Stock Exchange, though over the past year, they have lost 98 per cent of their value.