Norwegian to focus on a strong European network
Norwegian’s Board of Directors has today outlined a simplified business structure and dedicated short haul route network. With this plan, Norwegian can build a robust and solid company that will attract investors and continue to serve new and existing customers.
Aviation Updates Philippines – Norwegian has long been recognized as an industry leader in low cost
travel, winning numerous awards. The company will build on this foundation,
focusing on its core Nordics business, operating a European short haul network
with narrow body aircraft. The airline will continue to meet its customers’
needs by offering competitive fares across a broad range of domestic routes in
Norway, across the Nordics and to key European destinations.
“Our short haul network has always been the backbone of Norwegian and will
form the basis of a future resilient business model,” said Jacob Schram, CEO
of Norwegian.
The current plan is to serve these markets with around 50 narrow body aircraft
in operation in 2021 and to increase that number to around 70 narrow body
aircraft in 2022. Furthermore, Norwegian targets 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. The company has received concrete
interest in participation in the private placement. Norwegian has recently
reinitiated a dialogue with the Norwegian government about possible state
participation based on the new business plan.
“I am pleased to present a robust business plan today, which will provide a
new start for the company. 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,” said Schram.
The COVID-19 pandemic has profoundly affected the entire aviation industry.
Travel restrictions and changing government advice continue to negatively
influence demand for long haul travel, and 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 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. Norwegian will continue to assess
profitable opportunities as the world adapts and recovers from the impact of
COVID-19.
“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, said Schram. “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.”
Customers with bookings affected by the future changes in our route network
will be contacted directly and will be refunded. The examinership and
reconstruction processes undertaken in Ireland and Norway will continue as
planned, and the plan presented today is subject to approval by the Examiner
and Reconstructor, support from the creditors and subsequently court approval.
Press release from Norwegian Media
No comments
The comments made below are the views of the commenter only. We reserve the right to remove comments that are offensive, harmful, or do not follow our community guidelines.