Published on January 14th, 2021 | by Alan Dwyer0
Norwegian to Cut Long-haul Routes
Norwegian’s Board of Directors has outlined a new business plan for the airline with a simplified business structure and a dedicated short haul network. The airline will cut out its long haul fleet of Boeing 787 Dreamliners. 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. It is expected that up to 2,000 jobs will be effected by this announcement.
The airline plans to cut back on its European short haul network too and concentrate on Norway, Scandinavia and key European destinations. Norwegian plans to operate 50 Boeing 737-800’s in 2021, increasing to around 70 in summer 2022.
In a statement, Jacob Schram, CEO of Norwegian said “Our short haul network has always been the backbone of Norwegian and will form the basis of a future resilient business model. 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. 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. 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.”
The examinership and reconstruction processes undertaken in Ireland and Norway will continue as planned, and the plan presented is subject to approval by the Examiner and Reconstructor, support from the creditors and subsequently court approval. Norwegian targets to reduce its debt significantly to around NOK 20 billion (€1.9 billion) and to raise NOK 4 – 5 billion (€388 million – €485 million) in new capital through a combination of a rights issue to current shareholders, a private placement and a hybrid instrument.
In recent weeks, seven of the Norwegian Boeing 787 Dreamliner fleet have been repositioned to Shannon for continued storage and return to their lessors. A further two have left the fleet and been repainted in the colours of Italian airline NEOS. One of these is currently stored in Shannon awaiting delivery. Several more of the Dreamliner aircraft remain stored in Prestwick in Scotland and Stavanger in Norway. Many of the Dreamliner fleet are owned by Irish Leasing companies AerCap and Avolon.