A significant development this week over the Norwegian Airlines climate quota fine, the airline has decided to go to court against Norway's climate authorities over fines the airline received. Norwegian Airlines claimed that they were undergoing significant restructuring at the time and could not meet the targets.
Meeting in court
The Norwegian Ministry of Climate and the Environment has decided to place a fine on Norwegian airlines in 2021 over its failure to meet a climate quota. The fine handed down to Norwegian is 400 million Norwegian Crowns ($40 million). The airline is disputing this fine due to a restructuring.
Geir Karlsen, CEO of Norwegian, said,
"We look forward to an orderly and proper clarification of this issue in court."
Norwegian was fined under the EU Emissions Trading System (ETS), a cap and trade system launched in 2005. Alongside this development, Norwegian Airlines is also asking for an extension on the fine due to the ongoing legal challenge.
Earlier, the low-cost budget airline threatened to seek legal action against authorities. Norwegian Airlines said:
"Norwegian has been notified that the Ministry of Climate and Environment has maintained that Norwegian is liable to pay a fee for the failure to meet its EU ETS obligations for 2020, in a period when the company was under reconstruction. Norwegian still disputes the fee, and will seek judicial review in the Norwegian courts. Norwegian will also seek suspension of payment until the matter has been finally determined."
Due to them having a subsidiary airline, Norwegian Air International Limited, the Irish Department of Communications, Climate Action and the Environment decided not to impose its fine against the airline.
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Is it fair on Norwegian?
2020 was not Norwegian Airlines' year. The airline was undergoing heavy financial stress and was facing a massive face-lift. In 2021, the Irish High Court granted the Norwegian Air Group a rearrangement and restructuring to help the company survive. To stay afloat, Norwegian was looking to reduce debts by $6 billion and cut its fleet from 156 aircraft to 51 aircraft.
Heavily impacted by the COVID-19 Pandemic, they were operating a very limited, if not bare minimum, flight schedule. The BBC claimed: "For the moment, Norwegian is a shadow of its former self." Clearly, Norwegian was not in a good state.
So, is it fair that the airline should pay? Some say it isn't, but some claim that Norwegian is in a good position to repay former debts.
Making a case for themselves, Norwegian Airlines commented on the Irish High Courts ruling stating,
"In the parallel Irish examinership process, the Irish High Court ruled that EU ETS' obligations are subject to cram down. Also, the Irish environmental authorities chose not to impose a fee on Norwegians' Irish subsidiary, Norwegian Air International Limited, despite its failure to meet its EU ETS obligations for 2020."
It seems that Norwegian is trying everything and doing its very best to get this fine removed. It will be exciting to see how the court proceedings will play out.
What do you think about this development? Do you think it's fair for Norwegian to pay the fine? Comment below.
Source: Aviation24.be; BBC News