AIRLINES

Budget carrier Norwegian Air to drop long-distance routes

A Norwegian plane takes off. Photo: Clara Margais/dpa/file photo.
The move will mean job cuts since the carrier was to file for bankruptcy for its subsidiaries in Britain, Finland, Italy, and the United States.

 Norway-based budget airline Norwegian Air announced on Thursday it planned to drop its long-distance routes and focus on destinations in Norway and Europe.

"Our short-haul network has always been the backbone of Norwegian and will form the basis of a future resilient business model," chief executive Jacob Schram said.

According to the revised business plan - approved by the board - Norwegian was to operate about 50 Boeing 737 aircraft in 2021, and increase that number to around 70 in 2022.

The move would  "unfortunately" mean job cuts since the carrier was to file for bankruptcy for its subsidiaries in Britain, Finland, Italy, and the United States, Schram said.

"This has been a really tough decision," Schram told an online briefing, saying over 2,000 employees would have to go.

The past year has been "extremely challenging," Schram said, citing travel restrictions introduced during the coronavirus pandemic that have weighed on the company.

Reconstruction

The airline in December secured approval from courts in Norway and Ireland to undergo reconstruction.

Even before the coronavirus crisis, the carrier had struggled following a rapid expansion. It has racked up massive debt thanks to leasing planes, and setting up new routes.

The current fleet comprises about 140 planes, including 35 Boeing 787 Dreamliner jets that have not flown since March 2020. 

Dropping long-distance routes was estimated to help reduce the debt by some 60% to about 20 billion kroner (2.4 billion dollars).

In addition, it aimed to raise 4 billion to 5 billion kroner in new capital, and the carrier said it has asked to receive funds from a Norwegian state-backed rescue package.