In November 2020, Norwegian Air filed for bankruptcy protection. The company’s board of directors today outlined a simplified business structure and no longer includes long-haul flights.
Norwegian will no longer fly 787s
Norwegian’s entire long-haul fleet of Boeing 787-9 has been stopped since March 2020, due to travel restrictions, along with the general decline in demand. With future demand remaining highly uncertain, the company believes that a long-distance network is no longer viable. This means Norwegian will no longer make long-haul flights and will get rid of its Boeing 787.
Unfortunately, this also means that legal entities that mainly employ long-distance employees in Italy, France, the United Kingdom and the United States have contacted insolvency practitioners.
Norwegian states that “it will continue to evaluate profitable opportunities as the world adapts and recovers from the impact of COVID-19. Since the airline was not making money on pre-coronavirus long-haul flights, I have a hard time imagining that this will come back.
Norwegian will dispose of its 787 fleet
Norwegian to focus on European network
With its new streamlined business structure, Norwegian will focus on its European operations. The hope is “to build a robust and solid company that attracts investors and continues to serve new and existing customers”.
The company will focus on its main Nordic businesses, operating a short-haul network exclusively with narrow-body aircraft. The focus will be on routes within Norway, through the Nordic countries and to major European destinations.
The plan is to serve these markets with about 50 narrow body aircraft by 2021 and increase that number to around 70 narrow body aircraft by 2022.
Norwegian aims to reduce debt significantly, to around NOK 20 billion, and raise NOK 4-5 billion in new capital through a combination of issuing rights to current shareholders, private placement and a hybrid instrument. The company also returned to dialogue with the Norwegian government about the possible participation of the State in the new business plan.
Norwegian will focus on its European network
This development is inevitable, but sad
I have two different takes here.
First, for consumers, this is a sad development. Norwegian probably offered the best passenger experience among all low cost airlines across the Atlantic – the 787s were modern, had wi-fi and a solid premium economy product. This was a real added value across the Atlantic for consumers, a pity that was not equally beneficial for the company. 😉
Even for those who have not actually flown with Norwegian, there is no denying that Norwegian has contributed to lower fares in the Atlantic.
Then there is the other point – the Norwegian is hanging by a thread. The airline was struggling even before the pandemic, and the company has been on the verge of liquidation more times than I can count. At that point, the company’s ownership structure has changed completely, and the company owes enormous debt.
So while it is a sad event, I think for months I hoped the company would not survive, let alone operate long-haul flights.
Operating 50-70 planes with a focus on Nordic in the coming years still looks optimistic, so we’ll see how that will develop.
Norwegian Air Premium 787 Economy
Result
As part of its new business plan, Norwegian Air will abandon its long-haul operations and also get rid of its 787s. These planes have not flown in almost a year, and the airline knows that long-haul flights are not part of this business model to survive. Instead, Norwegian will focus on flying within Europe, with a particular focus on Nordic countries.
Are you sad to see Norwegian long-haul flight?