Monday, 20 April 2020

Is this the start of a long painful goodbye?.................Norwegian’s pilot and cabin crew companies in Sweden and Denmark file for bankruptcy

Norwegian’s pilot and cabin crew companies in 

Sweden and Denmark file for bankruptcy

Photo Norwegian

The European airline Norwegian dropped a major bombshell today that will have long term implications for the airline's staff and its future operations. 

Norwegian's pilots and cabin crew in Scandinavia are employed by subsidiaries in the Norwegian Group, these companies are now applying for bankruptcy. The shock news was delivered without fanfare and will affect more than 4700 pilots and cabin crew, about 700 pilots and 1,300 cabin crew based in Norway, France and Italy are not affected. Plus due to the extraordinary situation, Norwegian has also notified OSM Aviation that it has cancelled the crew provision agreements with several of its jointly owned OSM Aviation subsidiaries. These companies have crew based in Spain, UK, Finland, Sweden and the US.

Norwegian Pilot Services Sweden AB

Norwegian Pilot Services Denmark ApS

Norwegian Cabin Services Denmark ApS

Norwegian Air Resources Denmark LH ApS

"The impact the Coronavirus has had on the airline industry is unprecedented. We have done everything we can to avoid making this last-resort decision and we have asked for access to government support in both Sweden and Denmark”, said CEO of Norwegian, Jacob Schram.

“Our pilots and cabin crew are the core of our business and they have done a fantastic job for many years. It is heart-breaking that our Swedish and Danish pilot and cabin crew subsidiaries now are forced to file for bankruptcy, and I’m truly sorry for the consequences this will have for our colleagues. We are working around the clock to get through this crisis and to return as a stronger Norwegian with the goal of bringing as many colleagues back in the air as possible,” Schram said.

In Norway, there are efficient furlough opportunities which means that the government pays for all salary-related costs throughout the duration of the furlough period. Unfortunately, there is not the equivalent coverage in Sweden or Denmark schemes.

The process of the subsidiaries filing for bankruptcy is now being managed by bankruptcy courts and bankruptcy trustees in the respective countries.

Is this the very start of a long and painful goodbye for Norwegian?  Many analysts seem to think this is the beginning of the end of the airline as it teeters on the brink of a total collapse.  Three business travel companies in the UK have removed Norwegian from their acceptable ora allowed airlines lists,  with one cancelling all travel with the airline for the rest of this year. 

The airline had been in a rather precarious position for months prior to the current coronavirus crisis,  having suffered from the grounding of the fleet of Boeing 737 Max aircraft, had to use expensive wet-lease arrangements to cover for its fleet of stricken Boeing 787 Dreamliner aircraft when they had a series of engine issues and selling off it Argentinian operation barely a year after starting it.  The losses continue to mount,  the debt gets bigger and the future is looking less secure post-COVID for the carrier.  My gut feeling is they will be gone by the end of the year,   I hope I'm wrong,  they are a good airline from a passengers point of view,  it would be a real shame if they are consigned to the history books, but I fear, that is where they are heading. This is the start of the long painful goodbye.

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