Norwegian scraps long-haul network in bid for survival

Sunday, 14 Jan, 2021 0

Beleaguered Norwegian Air has abandoned its long haul operation in a move that will see further UK job losses.

The carrier said it will focus purely on short haul routes as is battles to survive the Covid pandemic.

Outlining a new strategic plan, Norwegian said the simplified route network will create a ‘robust and solid company that will attract investors and continue to serve new and existing customers’.

Along with many airlines, Norwegian has been battered by Covid, with the airline previously admitting it was in a battle for survival.

It has already furloughed or laid off 8000 staff and warned the outlook was grim without further financial help from the Norwegian Government.

Norwegian operated a number of long haul routes from Gatwick, including New York, Boston, Orlando. Miami, Tampa, Chicago, San Francisco, Los Angeles, Austin, Seattle, Denver, Rio and Buenos Aires.

The airline’s entire Boeing 787 Dreamliner fleet has been grounded since March with future demand for long-haul flying remaining ‘highly uncertain’.

"Under these circumstances a long haul operation is not viable for Norwegian and these operations will not continue," the carrier said in a statement. "The consequence of this 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 unclear how many UK jobs will be impacted.

Norwegian Chief Executive Jacob Schram said: "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 reorganisation process.

"It is with a heavy heart that we must accept that this will impact dedicated colleagues from across the company.

"I would like to thank each one of our affected colleagues for their tireless dedication and contribution to Norwegian over the years."

Schram added: "Our short haul network has always been the backbone of Norwegian and will form the basis of a future resilient business model."

Norwegian plans to operate around 50 narrow body aircraft on European routes in 2021, rising to 70 in 2022.

It will aim to ‘significantly’ reduce its debt significantly to around NOK 20 billion and to raise NOK 4 to 5 billion in new capital through a combination of a rights issue to current shareholders, a private placement and a hybrid instrument.

The company said it has received ‘concrete interest’ in the capital raising and has reopened talks with the Norwegian government about possible state participation.

"By focusing our operation on a short haul network, we aim to attract existing and new investors, serve our customers and support the wider infrastructure and travel industry in Norway and across the Nordics and Europe," Schram said.