No more red-nosed Dreamliners over the Atlantic or across Asia. Norwegian Air (DY) announced today its decision to abandon long-haul operations, simplifying its business structure and operate “a dedicated short-haul route network”. A return to the past, in some ways, when the Scandinavian low-cost imposed itself as one of the most successful and fast-growing European cìairlines at the beginning of the 2000s, ranking third among low-cost carriers in Europe (after Ryanair and Easyjet) in point of fleet dimension, flights operated and passengers carried.
In an official note released today, the airline’s CEO Jacob Schram said that Norwegian will continue “to meet its customers’ need by offering competitive fares across a broad range of domestic routes in Norway, to the Nordics and to key European destination”. Norwegian Shuttle, the Oslo-based branch of the group which operated the most of short-to-medium haul Boeing 737s, today has a mere 19 twinjets remained in the fleet, down from 100+ it operated just a couple of years ago, while subsidiary Norwegian Air Sweden has 43. The Norwegian group today announced plans to operate around 50 of those narrow body aircraft in 2021, rising to 70 in 2022. “Our short-haul network has always been the backbone of Norwegian and will form the basis of a future resilient business model,” said Schram.
Norwegian’s long-haul ambitions materialised in 2013 through the registration (in Ireland) of Norwegian Long Haul AS division and the launch of services from Oslo and Stockholm to New York JFK and Bangkok. In the following five years the network grew to 15 destination in the US and the Caribbean plus two in Thailand; hubs were inaugurated in London (Gatwick), Paris (Charles De Gaulle), Barcelona and Rome (Fiumicino), with a fleet just shy of 40 Boeing 787-8s and 787-9s. Besides offering cheap fares in Economy, Norwegian developed a distinctive, stylish long-haul Premium Economy product. In 2018 it started services from London to Buenos Aires, Argentina, with the aim to develop in South America a business model similar to the one created in Europe through a dedicated subsidiary called Norwegian Air Argentina.
This fast-paced development in point of fleet, bases and network had resulted in a heavy toll on business trends at the end of the previous year, already, when the carrier had posted a net loss of NOK 1,794mln (USD 212.3mln), followed by losses for NOK 1,454mln (USD 172.1mln) in 2018 and NOK 1,609 (USD 190.4mln) in 2019. Meaning that Norwegian was in a very troubled position, financially, even before the Covid pandemic and the travel bans issued by governments hit the industry in March 2020. So much in trouble that in the previous couple of years it had been forced to cut the fleet and drop several routes, including some transatlantic services and destinations.
In the aftermath of the Covid pandemic all the Boeing 787s and the vast majority of Boeing 737s were grounded and stored, with some 85% of flights cancelled and 90% of the workforce temporarily laid off. The airline secured a GBP 230mln State bailout shortly after, but CEO Jacob Schram recently referred to the lack of further government financial support for Norwegian as “a slap in the face”. Norwegian is now seeking to raise some NOK5bln (around $590 million) through a new rights issue, a hybrid instrument and a private placement.
Thousands of jobs will be lost in the UK, France, Spain and Italy as a consequence of the ditching of the long-haul side of its business, according to The Indipendent. (Photo Wikimedia Commons)