Norwegian to drop long-distance flights

Norwegian airplanePhoto: Ørn E. Borgen - NTB

The airline Norwegian will, in the future, focus on a European route network without long-haul. At the same time, debt will be reduced to NOK 20 billion.

The board presented its updated plan on Thursday. Norwegian will drop its long-distance network and instead focus on domestic travel in Norway, travel in the Nordic region, between the Nordic region and important destinations in Europe.

The plan is to have around 50 aircraft in operation in these markets by 2021 and gradually increase to approximately 70 aircraft by 2022.

“Domestic travel in Norway and flights between our Nordic domestic market and the rest of Europe have always been the backbone of Norwegian’s route network, and this is what also forms the basis for how Norwegian will look in the future,” CEO of Norwegian Jacob Schram said.

Fresh capital

The debt will be reduced to NOK 20 billion. The company will raise between NOK 4 and 5 billion in fresh capital through combinations of issues and other forms of equity.

The new plan means that Norwegian will also get rid of the 35 remaining long-haul aircraft Boeing 787 Dreamliner. 

The entire fleet has been parked since March last year.

The company points out that the pandemic has had major consequences for all aviation, especially long-distance travel.

“It will take a long time before the demand for long-distance travel is back, and therefore we have chosen to concentrate on a strong European network when we come out of the reorganization process. 

“This decision will, unfortunately, affect many of our employees, and in that way, this is a difficult decision to make,” Schram said.

Applying for government assistance

Norwegian hopes the updated plan will receive state aid. The company has sent a new application to the government. 

Schram believes that emphasis on short-distance networks will attract investors and ensure a good service for customers and secure jobs.

The restructuring was met with positive signals from government teams.

“What Norwegian is now outlining is something different to the request we considered in November last year. 

“We are now in the process of a thorough assessment of this new application,” Minister of Trade and Industry Iselin Nybø (V) said. 

Nybø says the government will process the application as soon as possible.

Minister of Transport and Communications Knut Arild Hareide (KRF) also believes the change is good news.

“If Norwegian can emerge through this as a financially strengthened and well-run company, it will be positive for Norwegian aviation, for the employees, and for the passengers,” he said.

Customers with flights affected by the changes will be contacted directly, and future canceled flights will be refunded.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayNews

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