Oslo-based airline Norwegian on Thursday announced that it will stop its transatlantic and Asian network of long-haul flights and focus on creating a strong European network.
As underlined in a company announcement, travel restrictions and changing government advice due to the coronavirus (Covid-19) pandemic continue to negatively influence demand for long haul travel.
It is reminded that Norwegian’s entire Boeing 787 Dreamliner fleet has been grounded since March 2020.
“Future demand remains highly uncertain. Under these circumstances a long-haul operation is not viable for Norwegian and these operations will not continue,” the announcement said.
The consequence of the company’s decision is that the board of directors of the legal entities employing primarily long-haul staff in Italy, France, the UK and the US have contacted insolvency practitioners.
“It is with a heavy heart that we must accept that this will impact dedicated colleagues from across the company,” said Norwegian CEO Jacob Schram.
New start for Norwegian: Focus on short haul network
The airline’s Board of Directors on Thursday outlined a simplified business structure and dedicated short-haul route network. The plan is expected to allow Norwegian to “build a robust and solid company” that will attract investors, continue to serve customers and support the wider infrastructure and travel industry in Norway and across the Nordics and Europe.
“Our short-haul network has always been the backbone of Norwegian and will form the basis of a future resilient business model,” said Norwegian CEO Jacob Schram.
The announced plan sees the airline’s short-haul markets served with some 50 narrow body aircraft in 2021 and to increase that number to around 70 in 2022.
Norwegian is also aiming 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.
Moreover, the company has recently reinitiated a dialogue with the Norwegian government about possible state participation based on the new business plan.
Customers with bookings affected by Norwegian’s future changes in its route network will be contacted directly and will be refunded.