By Terje Solsvik
OSLO (Reuters) - Norwegian Air's <NORR.OL> July passenger volume fell by 90.4% from a year earlier as most of its fleet remained grounded due to the coronavirus pandemic, it said on Thursday.
The budget carrier flew just 356,093 passengers during the month compared to 3.71 million in July 2019.
"Although customer demand has increased compared to the almost non-existent levels in April, May and June, the market situation remains challenging," Norwegian said in a statement.
Competitor Virgin Atlantic Airways [VA.UL] on Tuesday became the latest carrier to seek bankruptcy protection from a U.S. court as the hard-hit industry seeks to restructure.
Norwegian used only 20 of its aircraft in July, up from eight in June, but more than 100 jetliners are still parked amid a sharp fall in global travel.
The company, which revolutionised transatlantic travel by offering cheap fares, won backing in May from owners and creditors for a conversion of debt to equity and aims to rebuild operations, albeit on a smaller scale.
"Norwegian will continue to evaluate demand, travel advice and infection control measures while adjusting its network accordingly," it said.
Initially limiting its operations during COVID-19 to domestic flights in Norway, the airline now flies more widely in Europe while its transatlantic business is on hold.
On June 29 the airline cancelled orders for 97 new Boeing <BA.N> aircraft and said it would claim compensation from the U.S. planemaker for the grounding of the 737 MAX and engine problems on its 787 Dreamliner jets.
Boeing said it was working with Norwegian on a path forward, as it was with other operators, but would not comment on commercial discussions.
Originally a small regional airline in Scandinavia, Norwegian made its breakthrough on the global stage with a multi-year order in 2012 for up to 372 aircraft, of which 222 were from Boeing and 150 from Airbus <AIR.PA>.
Its shares have fallen 95% so far this year.
(Reporting by Terje Solsvik; Editing by Kevin Liffey and Edmund Blair)