Its founder and CEO resigned abruptly in July. Its stock is down more than 85% in the past year. Passenger numbers are falling as it’s had to ground planes and cancel routes. And now Norwegian Air is asking creditors for a two-year extension to pay back $380 million in bonds, casting further doubts that the once high-flying airline can weather what’s been a year to forget.
Coming into 2019, Europe’s third largest low-cost carrier was firing on all cylinders. In 2018, Norwegian flew a record 37.3 million passengers, touting a robust “load factor” of 86 percent. It launched 35 new routes, expanding into South America, and took delivery of 25 brand new aircraft.
And then the Ethiopian Airlines tragedy happened in March, causing the global grounding of the Boeing 737 Max that looks likely to drag into next year. Norwegian responded by shutting down its fleet of 18 737 Max planes, representing a vital piece of its growing route business. Passenger numbers have fallen throughout the busy summer period. And, beginning on September, 15, it will suspend flights between three airports in Ireland and three North American destinations: New York Stewart, Providence, RI, and Hamilton, Ontario. “Considering the grounding of the Boeing 737 MAX aircraft, we have concluded that these routes are no longer commercially viable,” the company said last month.
“They are managing the crisis as best they can, but they are on the verge of a cliff edge,” Bernstein analyst Daniel Roeska told CNN Business.
The fallout of the 737 MAX fiasco can be felt across the industry, but particularly for budget airlines such as Norwegian, Ireland’s Ryanair, Southwest Airlines and larger carriers such as American Airlines, which are particularly reliant on the narrow-body aircraft for their lucrative mid-haul markets.
In July, Michael O’Leary, chief executive officer of Ryanair, Europe’s No. 2 airline, warned investors that the uncertainty about the availability of the 737 Max would cut into its growth projections and that it would be forced to scale back operations at unspecified airports and abandon whole markets. Ryanair’s shares are down more than 20 percent since the Ethiopian Airlines crash on March 10.
This week, Norwegian asked bondholders for a bit of leniency in paying back two of its biggest bonds to November, 2021, and February, 2022, respectively. In return, it’s putting up as collateral its take-off and landing slots at London Gatwick Airport and a package that includes a “pledge over all shares in Norwegian Air Norway AS.”
The Gatwick slots alone, it says, have “an independent valuation from a well-reputed third-party in excess of the current nominal bond value,” which currently amounts to $380 million.
In a sign of just how valuable those Gatwick slots are, the company announced on Tuesday a flurry of autumn deals for flights originating out of London’s busy No. 2 airport, including £134.90 ($164) one-way to various U.S. destinations and £28.90 ($35) one-way to European airports.
Meanwhile, the company’s search for a CEO continues. Founder Bjoern Kjos, and architect of the company’s aggressive expansion strategy, stepped down in the summer as pressure from investors grew over the company’s flagging business prospects and its lackluster response to the Boeing 737 MAX controversy.
More must-read stories from Fortune:
—A rare tech company where women dominate
—Why WeWork won’t be in the S&P 500 after its IPO
—Is it “only human” to feel anxious about money? Talking finance with Sophia the Robot
—Europe’s cyber watchdog for banks has a problem—it keeps getting hacked
—Listen to our audio briefing, Fortune 500 Daily
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.