SHARE
COPY LINK

AIRLINE

Low-cost airline Norwegian drops long-haul services

Norwegian Air Shuttle, a pioneer in low-cost long-haul flights, said on Thursday it would drop long distance routes and focus on Europe as it tries to restructure and avoid bankruptcy.

Low-cost airline Norwegian drops long-haul services
File photo: AFP

“The board today presented the company's new business plan based on a simpler structure and a network of European routes with no long-haul,” Norwegian said in a statement, adding at a press conference that the move would affect more than 2,000 jobs.

Norwegian Air Shuttle, which had grown to become Europe's third-biggest low-cost carrier, had revolutionised transatlantic travel in recent years by trying to extend the no-frills model to long-haul flights.

But the company racked up repeated losses, largely because of technical misfortunes. Its Boeing 777 Dreamliners encountered problems with their Rolls-Royce engines, and then its Boeing 737 MAX aircraft were grounded, as elsewhere in the world, after two fatal crashes.

At the same time, the company's ambitious expansion programme saddled it with mountains of debt, totalling 66.8 billion kroner (6.5 billion euros) including liabilities, at the end of September.

In the red since 2017, the company's woes deteriorated further with the Covid-19 pandemic which paralysed global air travel last year.

Out of a pre-Covid fleet of 140 aircraft, only six of its planes have been flying in recent months and the number of staff still on the job has fallen to 600, from 10,000 before the crisis.

The company has been placed under bankruptcy protection in Ireland and Norway to shield it from creditors while it tries to come up with a financial restructuring plan.

On Thursday, Norwegian said it wanted to reduce its debt to around 20 billion kroner, raise four to five billion kroner in capital, and have 50 aircraft in use this year and 70 next year.

Norwegian's fate depends however on the outcome of negotiations with creditors.

READ ALSO: Norwegian Air to seek bankruptcy protection in Norway

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

AIRLINE

Airline Norwegian posts 15 billion kroner loss after nightmare 2020

Low cost airline Norwegian has registered a loss of 14.9 billion Norwegian kroner for 2020, a year in which the company saw a drastic reduction in passenger numbers and was on the brink of bankruptcy.

A file photo of a Norwegian Air Shuttle plane in Finland.
A file photo of a Norwegian Air Shuttle plane in Finland. Heikki Saukkomaa / Lehtikuva / AFP

Low cost airline Norwegian has registered a loss of 14.9 billion Norwegian kroner for 2020, a year in which the company saw a drastic reduction in passenger numbers and was on the brink of bankruptcy.

The company published its annual results on Friday, revealing the huge operating loss.

Norwegian’s 2019 result, a loss of around 1.7 billion kroner, had put the company in a difficult position even prior to the outbreak of the Covid-19 pandemic.

The coronavirus outbreak and its consequent travel restrictions reduced the company’s passenger numbers to 6.9 million in 2020. That is 29 million fewer than in 2019.

Not all of the loss is due to fewer passengers. Around half of the company’s devaluation is attributed to a depreciation of the value of its aircraft fleet, news wire Ritzau reports.

“2020 was an exceptionally demanding year for air travel and for Norwegian,” CEO Jacob Schram said in a statement on the annual results.

“In light of that, the result for the fourth quarter (of 2020) is not surprising. Unfortunately, the majority of our employees are furloughed and many have lost their jobs – in part because of the closure of long distance services,” he added.

The company was already in debt prior to the pandemic and is now under bankruptcy protection in Ireland and is undergoing similar process in Norway.

READ ALSO:

SHOW COMMENTS