In a statement, Norway’s industry minister Iselin Nyboe said the country was willing to take part in refinancing the airline, Reuters reports, a move welcomed by Norwegian chief Jacob Schram.
"Norwegian is pleased to announce the government of Norway has decided to support and contribute to the airline’s funding of new capital, pending certain conditions," said Schram.
"This move significantly increases Norwegian’s chances of working through the crisis caused by the pandemic and to position itself as a key player within Norwegian and European aviation.
“Norwegian has been faced with a very challenging and demanding situation due to the pandemic, and the government’s support significantly increases our chances of raising new capital and getting us through the reconstruction process we are currently in.
"We still have a lot of work ahead of us, but a participation from the government underscores that we are heading in the right direction."
It comes after Norwegian last week confirmed it would end all long-haul operation and focus instead solely on short-haul as part of a prolonged restructuring effort, which saw the airline last year enter into an examinership, or bankruptcy protection, process in Ireland and additional reconstruction negotiations in Norway.
The carrier’s proposed new "simplified business structure" will be built around a dedicated short-haul route network, with its entire fleet of Boeing 787 Dreamliners grounded since last March.
As a result, Norwegian’s entire long-haul operation will be mothballed at the cost of nearly 2,200 job losses, around half of which will come at its European long-haul base at Gatwick.
It expects to emerge from the restructuring process with an initial fleet of around 50 aircraft, down from 138, which could gradually rise to around 70 in 2022 providing there is sufficient demand.
The airline’s debts will be reduced to around NOK 20 billion (£1.7 billion) and it hopes to raise an additional four to five billion Norwegian krone (£350-£430 million) in new capital.
“With a new business plan, and a participation from the government, we are confident we can attract investors and get through the examinership and reconstruction process," said Schram.
"We have received extensive support from political parties, customers, colleagues, shareholders, and business partners, for which we are extremely grateful, especially during these challenging times.
"Furthermore, the government’s support will contribute to help securing jobs and maintain healthy competition within the aviation sector."
