Monday, 1 March 2021

More losses for Norwegian

The budget airline Norwegian reported its fourth-quarter 2020 results last week, showing more massive losses as the carrier edges slowly out of bankruptcy protection. The troubled airline reported a net loss of  NOK 16.6 billion.

Out of a current fleet of 131 aircraft, an average of 15 were operational during the fourth quarter, mainly on domestic routes in Norway. Norwegian carried 574,000 customers, a decrease of 92 percent compared to the same period in 2019. The load factor was 52.4 percent, a decrease of 32.5 percentage points compared to the fourth quarter of 2019.

Jacob Schram, CEO of Norwegian, said: "2020 was an exceptionally difficult year for the aviation industry and for Norwegian. Consequently, the fourth-quarter results are as expected. Unfortunately, many of our employees are furloughed or have lost their jobs, partly due to the company’s decision to cease long-haul operations."

The airline is facing increased legal challenges and investigations into its treatment of former employees and the tangled web of subsidiary, sister companies used to syphon funds away from the bankrupted entities to reduce the amount paid to redundant staff. 

Schram says: "Now, we are doing everything we can to emerge as a more financially secure and competitive airline with an improved customer offering, and as soon as Europe begins to reopen, we will be ready to welcome more customers on board."

The airline is in the process of reducing debt, reducing the size of the fleet in an effort to make the company financially attractive to secure new capital. The plan is to cut its debts to around NOK 20 billion whilst at the same time raising NOK 4 - 5 billion in new capital. 

In the near future Norwegian aims to operate a fleet of 50 narrow-body 737 aircraft on a short-haul mainly domestic route network. It had previously expected that number to be operation by the end of 2021, however, the slow start to the year, puts the deadline in jeopardy. 

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