Norwegian Air's first passengers to Stewart airport arrive from Edinburgh, Scotland on June 15, 2017. Almost half of Stewart’s 690,411 passengers in 2018 were Norwegian customers. [KELLY MARSH/TIMES HERALD-RECORD FILE PHOTO] ▲

After being repeatedly written off for dead in recent weeks, Norwegian Air roared back to life Tuesday with a plan to resuscitate its balance sheet and remain in the skies, including the skies over New York Stewart International Airport.

The low-cost carrier, whose stock has lost 60 percent of its value since April, announced it will raise $353 million through a fully underwritten sale of additional shares later this month (FEB).

The announcement came days after IAG, the parent company of British Airways and Aer Lingus, said it would sell its 4 percent stake and no longer pursue a takeover of Norwegian – a development widely viewed as a death knell.

The cash infusion will allow Norwegian to cover $286 million in overdue bond covenants, debts that have been threatening to push the airline into bankruptcy since the amount of red ink from its breakneck expansion became apparent in October.

"The company is changing its strategic focus from growth to profitability,'' Norwegian said in filings with the Oslo Stock Exchange about the sale.

Bjorn Kjos, the company's CEO, said as much to analysts in their third-quarter conference call and subsequently moved to streamline operations and cut $237 million in expenses.

The cuts will play out through 2019 but they have already cost Stewart some flights and soon, crew bases.

The carrier's announcement, ironically, coincided with the Port Authority's announcement that Norwegian had propelled 2018 passenger volume at Stewart to a 10-year high in its first full year of service.

Almost half of Stewart's 690,411 passengers were Norwegian customers, a statistic that underscores just how much the Port Authority and a community hungry for more flights to more destinations have riding on the carrier's success.

The possibility that Norwegian's retrenching could potentially result in its abandoning the airport altogether puzzles Stewart boosters who point out its non-stop flights to Europe are invariably full.

"I'm under the impression that their business at Stewart has been very profitable, with very high load factors,'' said Louis Heimbach, chairman of the Stewart Airport Commission, in commenting on the cuts last month.

But experts in airline operations say load factors – the percentage of seats filled - are a misleading metric of profitability, especially in Norwegian's case.

The carrier's spending spree on new aircraft to support its eye-popping expansion has left it with exceptionally high overhead and crippled its ability to cope with such routine bumps in the operational road as fluctuations in fuel prices.

In a few short years, Norwegian has transformed itself into an international airline from a European one and now carries 37 million passengers a year on 500 routes to 150 destinations, many of them in the United States.

Its fleet of 150 aircraft has an average age of 3.7 years, to make it among the industry's youngest.

"A high load factor says you're successful, yes, but it doesn't say you're profitable,'' said Bijan Vasigh, a professor of economics and finance at Embry-Riddle Aeronautical University. "Low ticket prices don't bring you profit when you have such high overhead."

And a low-cost airline, added Brandon Wild, an associate professor of aviation at the University of North Dakota, can't suddenly raise fares significantly without risking the loss of the very customers they attracted in the first place.

"So they're rethinking their route network and their base structure to reduce their costs,'' said Wild. "It's a standard industry model when times get tough."

Wild predicted Norwegian's decision to close its pilot and crew bases at Stewart and staff its flights from Europe will have little to no effect on passengers, noting that Delta flies on six continents yet bases all its pilots in the United States.

The consolidation, however, is likely to cost some of the 30 employees their jobs.

Its decision about which routes go and which routes stay, Wild continued, will come down to which routes make the most money – or lose the least – and there's no telling where Stewart will fall in that equation.

"You want to deploy your planes where you have the best chance of making the most money,'' he said.

Wild and Vasigh agreed that Norwegian will be slow to restore bases and routes when its financial situation improves and market conditions warrant, in part because of having generated fierce competition, particularly in Europe.

After announcing the stock sale, Kjos, Norwegian's visionary as well as its CEO, said the company will detail the measures being taken to strengthen its balance sheet when it releases its fourth-quarter earnings Thursday.

The airline, after showing a profit of $368 million in 2016 and $7 million in 2017, is projecting a loss of $260 million in 2018.

Then, on Feb. 19, Norwegian will ask shareholders to approve the so-called rights issue, a stock sale limited to current investors and underwriters.

Sufficient commitments are in place to ensure the sale's success, even as questions persist about whether $353 million is enough to see the company through 2019.

"They're in correction-mode, self-protection mode, now, and putting their emphasis on their shareholders and financial stability – as they should,'' said Vasigh.

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