It’s not always easy to wipe the plasters. The low-cost airline Norwegian Air Shuttle, which had revolutionized transatlantic transport in recent years by trying to extend the revenues of the low-cost model to long-haul (concentration on traffic between large cities, intensive use of planes, etc.), makes a 180 degree turn.
In great financial difficulty, the third European low cost will indeed give up the long-haul segment to concentrate on Europe, she announced Thursday.
“The board of directors today presented the new business plan for the company based on a simpler structure and a network of European connections without long distance,” Norwegian said in a statement.
A succession of setbacks
But the company has accumulated losses there due in particular to incessant technical setbacks: its Boeing 777 Dreamliner has experienced problems with their Rolls-Royce engines then its Boeing 737 MAX have, like other aircraft of this model in the world, been pinned to the ground after two fatal accidents.
At the same time, the ambitious expansion policy resulted in a surge in debt, which at the end of September reached 48.5 billion crowns (4.7 billion euros).
In the red since 2017, Norwegian has seen its difficulties worsen with the Covid-19 pandemic that crippled global air transport last year. Out of a pre-Covid fleet of 140 planes, only six aircraft have continued to fly in recent months and the workforce still in operation has fallen to 600 people from more than 10,000 before the crisis.
The company is currently placed under the protection of Irish and Norwegian bankruptcy laws to protect itself from creditors while it puts in place a financial restructuring.
On Thursday, it said it wanted to reduce its debt to around 20 billion crowns, raise 4 to 5 billion crowns via a capital increase and put into operation some 50 planes this year, then around 70 in 2022. Norwegian’s future remains conditional on an agreement currently being negotiated with creditors.