airline Norwegian is on the brink as its pilots were warned there was no money to pay them – or make them redundant.

The carrier is “mortgaging everything they own” to try and stay afloat. Norwegian pilots have been warned there isn’t enough may to pay them. Frantic bosses are converting debts into shares in a bid to stop flatlining, but the move is predicted to wipe out the value of existing shares.

The airline’s jets have left their slots at the UK’s second major hub Gatwick airport.

The firm has around £5billion of debt against a market value of £78million. Sources close to Norweigan told The Sun it was true to say there was a “last-ditch effort” to save the airline.

The carrier was afforded a ‘phase one’ £30million rescue package by the Norway government. But ‘phase two and three’ of a rescue deal – worth £280million and needed to see the carrier through the coronavirus crisis – won’t arrive unless the airline restructures and lowers its debt threshold.

This is the move that requires creditors to convert debt to equity – effectively becoming owners of Norweigan.

But such a move means existing shares becoming worthless – and has seen a mad rush to sell stakes in the last 24 hours while they are still worth something.

If bondholders don’t agree to a decision to switch debt to equity next month then the airline will be permanently grounded.

Norwegian Air is a low-cost airline, founded in 1993. It was initially founded to take over the regional airline services produced by Busy Bee for Braathens in Western Norway. However, it only started operating as a low-cost carrier with bigger Boeing 737 aircraft in 2002, operating a number of domestic routes in Norway. Its first European routes outside of Norway launched in 2006. Today, it has 11,000 members of staff and flies 500 routes to more than 150 destinations in Europe, North Africa, the Middle East, Asia, South America, the US, and Canada. The airline has a fleet of around 160 aircraft.

A source said: “There is no magic pot in the bank. Norweigan is in the same situation as Virgin Atlantic, Air France, and Lufthansa in needing bail-outs to survive.”

Pilots were last night warned they face a pay freeze – and will rely on the government’s job retention scheme plan for any salary.

The company’s entire fleet, across different subsidiaries, is believed to be hit – around 1,500 pilots and 3000 cabin crew.

A letter from cook pit crew union Balpa revealed discussions with OSM Aviation, whose parents firm is Norwegian.

It stated: “Norwegian have indicated to OSM that they will not be in a position to fund the April salary, and also OSM do not have sufficient funds to cover the salary or redundancies.”

The carrier’s subsidiary is “positive” the government’s furlough scheme will be implemented, but can’t guarantee when funds will be paid.

There are around 1,000 pilots and crew in the UK who fly for Norweigan and are employed through its OSM subsidiary.

Balpa and the Unite union negotiated with OSM a deal to reduce salaries – by 30 percent for pilots and 60 percent for crew in a battle to survive.

But staff have realized they would be better off under the government’s furlough scheme, in which they would receive 80 percent of salaries.

Norweigan does not have the cash-flow to pay this month’s salaries upfront and claim back furlough cash from the UK government later – a move taken by EasyJet.

So Norweigan staff face a month without pay until the furlough scheme kicks in.

With flights to and from the UK grounded, and bookings canceled, the firm has no money coming in here whatsoever.

The source said: “Norweigan is in the last chance saloon-like many other major airlines. But all hope is not yet quite gone.

“And UK crew face a month of no pay while the furlough scheme pays out wages. But hopefully, it is not going to be their last pay packet.”

A Norweigan spokesman told The Sun: “The crew employer, OSM, has been in constant dialogue with the relevant unions to reach the best possible agreement for our crew colleagues based in the UK.”

Shortly after the Oslo stock exchange reopened following the long Easter weekend, Norwegian’s share price was at one point down more than 60 percent compared with when the market closed on 8 April.

The carrier’s chief executive, Jacob Schram, said the proposed measures were necessary to secure “the next tranches of the Norwegian government state guarantee programme”.

Norway last month announced a £464million bailout for the aviation sector, half of which is earmarked for Norwegian.

Norwegian Air said it would hold a meeting with bondholders on April 30 to approve the terms of its rescue plan, Reuters reported.

If creditors approve the rescue plan, it will be put to a shareholders’ vote on May 4.

In a 14 April research note, Bernstein analyst Daniel Roeska describes Norwegian as being “at the end of the line”.

Mr Roeska believes there are two likely outcomes for the airline: “Either the bondholders agree a conversion price for their debt into equity, or they do not.

“If they agree, the firm continues to operate, but shareholders will be severely diluted.

“If they do not, then we expect operations to cease, bankruptcy proceedings to start, and shareholders to get nothing.”

Last month, The Sun told how Norwegian was feared to be days away from folding as its UK staff were told to choose between a 70 per cent pay cut or redundancy.

Last year they were teetering on the edge of collapse before receiving last-gasp financial backing to keep going.

The airline – the eight largest in Europe and third-biggest low-cost carrier after Ryanair and EasyJet – carried 30 million passengers in 2016.

The Sun was shown a shock ’emergency payment option’ sent to Norwegian UK employees.

They help run a fleet of 13 carriers from Gatwick airport.

Bosses at parent firm OSM Aviation said they had been “compelled to take immediate action in order to assure that operations will remain intact, once the commercial difficulties as caused by the present situation, cease to remain”.

The Nordic airline has already announced it would cancel 85 percent of flights and faces laying off 90 percent of its workforce, around 7,300 people.

Norwegian is struggling on, analysts said, thanks in part to a delay in delivery of their new 737 MAX aircraft.

In more airline news, British Airways pilots have been forced to take three months’ unpaid leave as the airline struggles to survive. www.thesun.co.uk