Norwegian Air Faces Immediate Liquidity Crisis as the Carrier Takes Severe Austerity Measures
Updated: Mar 16, 2020
Norwegian Air announced on Thursday the grounding of 40 percent of their long-haul fleet and cancellation of up to 25 percent of short-haul flights through May. On Friday, company CEO Jacob Shram expressed an immediate liquidity crisis.
Yesterday (March 12, 2020), Norwegian Air announced the cancellation of 4,000 flights, the grounding of 40 long-haul aircraft and a short-haul flight reduction of 25%. The carrier further announced that due to new travel restrictions they would cancel most of their long-haul flights to the US from Amsterdam, Madrid, Oslo, Stockholm, Barcelona and Paris between March 13th and March 29, 2020. All flights between Rome and the US have already been cancelled through the end of May. Additionally, from March 29th through the end of April, all flights to the US from Paris, Barcelona, Madrid, Amsterdam, Athens and Oslo will be cancelled. Norwegian will continue to operate their regular schedule between London-Gatwick and the US, which includes eleven routes. The airline will also temporarily layoff up to 50 percent or more employees as they navigate this extraordinarily difficult market environment due to the global COVID-19 pandemic. In Thursday’s announcement, Norwegian’s CEO, Jacob Shram said,
“This is an unprecedented situation and our main priority continues to be the care and safety of our colleagues. The new restrictions imposed further pressure on an already difficult situation. We urge international governments to act now to ensure the aviation industry can protect jobs and continue to be a vital part of the global economy.”
In a separate announcement on Friday, the carrier called on the Norwegian government to take powerful and extraordinary measures to strengthen Norwegian Air’s financial liquidity position during this critical phase. Regarding current and needed Norwegian Government measures, Mr. Shram stated,
“We welcome the fact that the Norwegian Government has decided to remove aviation taxes in Norway, but sadly, this is not enough as we’re in a very demanding situation at the moment. We need exact measures to strengthen our liquidity in the short term immediately. At the same time, it is crucial for us that the government will work on solutions for a phase two. We are asking for these solutions to come quickly. At the same time, we will take all measures necessary to reduce the financial losses this situation is causing us, no matter how painful they are. At the same time, we will also take care of our colleagues and customers in the best possible way.”
Norwegian Air is the world’s fifth largest low-cost carrier, carrying over 36 million guests in 2019. The airline operates over 500 routes to over 150 destinations in Europe, North Africa, the Middle East, Thailand, North America and South America. Norwegian operates a young and fuel-efficient fleet of over 160 aircraft, with an average age of only 4.6 years.
Source: Norwegian Air
Editor's Note: We stand by the entire Norwegian Air team and all airlines during this difficult period as the entire world fights to limit the transmission of, and ultimately recover from, the global COVID-19 pandemic. Once it has been defeated, we look forward to the emergence of an even stronger and more robust global commercial airline industry.