SHARE
COPY LINK

AIRLINE

Why is Norwegian scrapping flights from the Nordics to the United States?

Low-cost airline Norwegian is stopping all its long-distance flights from Sweden and Denmark due to low profitability. What has forced the company into making the cutbacks?

Why is Norwegian scrapping flights from the Nordics to the United States?
A Norwegian aircraft at Copenhagen Airport in 2016. Photo: ricochet/Depositphotos

The airline announced on Wednesday morning that routes between Stockholm and Copenhagen to the US and Thailand will all be stopped from March 29th, 2020. Although flights from Oslo to the US will continue, routes from Norway to Asia are also set for the chop.

That means Norwegian’s departures from Copenhagen to Boston, Los Angeles, New York, San Francisco and several destinations in Florida will all be cut.

That also applies to routes from Stockholm to the same US destinations.

Services from Oslo to the United States will continue as before, according to Norwegian’s press statement on Wednesday.

The company has cited overall demand and commercial viability as well as ongoing operational issues with Rolls-Royce engines on its Dreamliner aircraft in the decision to discontinue the Scandinavian departures.

“The intercontinental market in and out of the Nordics is small compared to global cities such as New York, London, Los Angeles, Paris and Rome. The total passenger potential is not big enough to justify a big intercontinental operation out of both Oslo, Stockholm and Copenhagen,” the company said in a statement.

“We are experiencing increased demand on a series of well-performing routes. To meet this demand, we have added more frequencies on flights from London, Paris and Barcelona to several cities in the US, enabling even more choice and affordable fares to the flying public on both sides of the Atlantic,” the company said.

READ ALSO:Norwegian cuts long haul flights from Stockholm and Copenhagen

The move represents the second time this year that Norwegian has reduced its services.

In September, the company cut six routes from Ireland to the United States and Canada, calling the routes “no longer commercially viable” in a statement issued in August.

Meanwhile, Jacob Schram is to take over as the company’s CEO from January 1st 2020, taking over from Bjørn Kjos, who stepped down during the summer.

Norwegian has previously tried to raise money by selling aircraft and has also advised its shareholders that sales of new shares may be necessary.

The company also wants to operate fewer, but fuller departures, with an overall plan to put ten percent fewer tickets on sale next year.

In addition to its own problems, Norwegian has been affected by the fact that it has 18 Boeing 737-MAX aircraft, currently under a flight ban after two major aviation tragedies involving the model.

The various measures appear to have helped the company somewhat, having posted its best-ever quarterly results ever in the third quarter of this year, and has also secured enough money to operate for the rest of this year.

Aviation media Aerotime nevertheless reports a cumulative debt of 61.7 billion Norwegian kroner ($6.7 billion), in the company’s third-quarter results for 2019.

A period of huge growth up to the end of 2018 saw the company finish last year with a net debt of 31.9 billion kroner ($3.4 billion). That resulted in a strategy for 2019 of stabilization, reduction of costs and improved liquidity.

The company has since saved 1.84 billion kroner ($200 million) through scaling down, Aerotime reports.

“As Norwegian moves from growth to profitability, we take a strict approach to route management and constantly evaluate route performance to ensure we meet customer demand,” the company said.

The company insisted however that passengers still had options to get from Sweden and Denmark to the US with Norwegian.

“With several daily departures from Arlanda and Copenhagen to both London Gatwick and Oslo, our long-haul destinations continue to be easily accessible for Swedish and Danish travellers at affordable fares. Norwegian is serving 11 US destinations from London-Gatwick  and five US destinations from Oslo,” the statement said.

The company also said that 23 of its 80 technical staff at Copenhagen Airport will be affected by the cuts to routes out of the Danish capital, but did not confirm they would be let go.

“They could for example, work at another location such as Stockholm or Oslo,” Andreas Hjørnholm, head of communication for the company’s Danish arm, told the Ritzau news agency.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

AIRLINE

Airline Norwegian posts 15 billion kroner loss after nightmare 2020

Low cost airline Norwegian has registered a loss of 14.9 billion Norwegian kroner for 2020, a year in which the company saw a drastic reduction in passenger numbers and was on the brink of bankruptcy.

A file photo of a Norwegian Air Shuttle plane in Finland.
A file photo of a Norwegian Air Shuttle plane in Finland. Heikki Saukkomaa / Lehtikuva / AFP

Low cost airline Norwegian has registered a loss of 14.9 billion Norwegian kroner for 2020, a year in which the company saw a drastic reduction in passenger numbers and was on the brink of bankruptcy.

The company published its annual results on Friday, revealing the huge operating loss.

Norwegian’s 2019 result, a loss of around 1.7 billion kroner, had put the company in a difficult position even prior to the outbreak of the Covid-19 pandemic.

The coronavirus outbreak and its consequent travel restrictions reduced the company’s passenger numbers to 6.9 million in 2020. That is 29 million fewer than in 2019.

Not all of the loss is due to fewer passengers. Around half of the company’s devaluation is attributed to a depreciation of the value of its aircraft fleet, news wire Ritzau reports.

“2020 was an exceptionally demanding year for air travel and for Norwegian,” CEO Jacob Schram said in a statement on the annual results.

“In light of that, the result for the fourth quarter (of 2020) is not surprising. Unfortunately, the majority of our employees are furloughed and many have lost their jobs – in part because of the closure of long distance services,” he added.

The company was already in debt prior to the pandemic and is now under bankruptcy protection in Ireland and is undergoing similar process in Norway.

READ ALSO:

SHOW COMMENTS