Norwegian Air Shuttle will exit the low-cost long-haul market to focus on services within Norway and to “key European destinations.” The carrier said ongoing COVID-19 travel restrictions mean that “future demand remains highly uncertain” for its flights to the US and Asia, making its long-haul operations no longer viable.
The carrier has 2,160 pilots and crew working at subsidiaries in the UK, U.S., Italy, Spain and France whose jobs will go; 1,100 of those staff are at Norwegian’s London Gatwick base.
In a Press Release dated January 14th, Norwegian’s Board of Directors has outlined a simplified business structure and dedicated short haul route network. With this plan, Norwegian can build a robust and solid company that will attract investors and continue to serve new and existing customers.
Norwegian has long been recognized as an industry leader in low cost travel, winning numerous awards. The company will build on this foundation, focusing on its core Nordics business, operating a European short haul network with narrow body aircraft. The airline will continue to meet its customers’ needs by offering competitive fares across a broad range of domestic routes in Norway, across the Nordics and to key European destinations.
“Our short haul network has always been the backbone of Norwegian and will form the basis of a future resilient business model,” said Jacob Schram, CEO of Norwegian.
The current plan is to serve these markets with around 50 narrow body aircraft in operation in 2021 and to increase that number to around 70 narrow body aircraft in 2022. Furthermore, Norwegian targets to reduce its debt significantly to around NOK 20 billion and to raise NOK 4 – 5 billion in new capital through a combination of a rights issue to current shareholders, a private placement and a hybrid instrument.
The COVID-19 pandemic has profoundly affected the entire aviation industry. Travel restrictions and changing government advice continue to negatively influence demand for long haul travel, and Norwegian’s entire Boeing 787 Dreamliner fleet has been grounded since March 2020. Future demand remains highly uncertain.
“Our focus is to rebuild a strong, profitable Norwegian so that we can safeguard as many jobs as possible. We do not expect customer demand in the long-haul sector to recover in the near future, and our focus will be on developing our short haul network as we emerge from the reorganization process, said Schram. “It is with a heavy heart that we must accept that this will impact dedicated colleagues from across the company.
Norwegian began offering low-cost long-haul services in May 2013, initially from Oslo and Stockholm Arlanda to New York John F Kennedy using Airbus A340-300s.
Following the arrival of the carrier’s first 787-8 aircraft later that year, further routes were added. Transatlantic service began from Copenhagen while Fort Lauderdale became its second destination in the US.
In the subsequent years, Norwegian became a disruptive force in the European aviation industry under the leadership of co-founder Bjørn Kjos, adding large amounts of capacity and rapidly increasing the number of routes, particularly to US destinations like Boston, Los Angeles, Newark and Oakland.
The airline carved out a niche in finding big point-to-point markets with room to grow and stimulate new traffic, as well as targeting unserved routes to secondary cites.
