Category Archives: Norwegian.com (Norwegian Air Shuttle)

Norwegian second quarter results: Positive effect of completed reconstruction process and steady uplift of demand

Norwegian reported its second quarter results and published the H1 2021 financial report. The results continued to be impacted by COVID-19 and travel restrictions in all markets. However, following the successful completion of the reconstruction process and the subsequent NOK 6 billion equity raise, the company is now well positioned for future growth and to respond to increased customer demand.

Geir Karlsen, CEO of Norwegian, said: “The H1 financial report and Q2 results mark a clear improvement in both the financial situation, due to lower operating costs and the successful completion of the reconstruction process of the company, and the gradual ramp up of our operations in response to increased passenger demand.”

Profit before tax (EBT) was NOK 1,590 million in the first half of 2021, compared with a loss of NOK 4,792 million in the same period in 2020. For the first half of 2021, production (ASK) was reduced by 94 percent compared to the same period last year. Total revenue in the first half of 2021 was NOK 591 million, compared with NOK 7,138 million in the same period last year, a decrease of 92 percent. Unit revenue increased by 22 percent following a yield increase of 93 percent and a decreased load factor by 28.8 percentage points. Average sector length decreased by 62 percent. At the end of first half of 2021, the total fleet comprised 51 aircraft. Up to 32 aircraft were operational during the first half of 2021 due to travel restrictions and lower demand.

In the second quarter of 2021, the company successfully exited the examinership and reconstruction process which improved equity by NOK 10.7 billion.

Norwegian has committed to be a price leader in the Nordic markets, offering affordable fares and a reliable service to more than 250 routes across its European network. The company value simplicity when travelling and thanks to the Norwegian Travel Assistant app and the award-winning loyalty programme ‘Norwegian Reward’, which counts over four million members, passengers can easily control every aspect of their journey. Onboard, Norwegian continues to offer a modern and comfortable flying experience with free WiFi available for all passengers.

”The results continue to be heavily impacted by international travel restrictions. However, Norwegian is now in a much stronger financial position and is able to plan for the future with renewed confidence and focus. Forward bookings continue to increase in response to the relaxation of travel restrictions and the roll out of international vaccination programs. We expect to see this trend continue in the remaining months in 2021 and through 2022,” Karlsen continued.

Cash and cash equivalents were NOK 7,475 million at the end of first half of 2021, an increase of NOK 4,808 million compared with the end of 2020. Norwegian now has a fully reconstructed balance sheet with close to zero net interest-bearing debt, a strong cash position and a rightsized business.

Norwegian releases its Summer 2022 schedule for UK and Ireland to Scandinavia with 142 weekly flights

Norwegian will continue to increase flights between the UK and Ireland to destinations across Scandinavia as the airline releases the summer 2022 flying program. All flights are now available to book offering a wide range of destinations from London, Edinburgh, Manchester and Dublin.

In total, across the European network, Norwegian will offer 259 from routes from the Nordics as a result of travel restrictions and quarantine requirements easing and consequently demand for flights increasing.

In 2020 and 2021, the aviation industry was hit hard by travel restrictions and quarantine requirements as a result of the COVID-19 pandemic. Norwegian expects that the ever-increasing vaccination rate will mean that the risk of new travel restrictions will be significantly lower in 2022.

London Gatwick will serve Oslo, Stavanger, Trondheim, Bergen, Helsinki, Stockholm and Copenhagen with a total of 115 weekly flights.

Manchester will serve Oslo, Stavanger, Bergen and Stockholm with a total of eight weekly flights.

Edinburgh will serve Oslo, Stockholm and Copenhagen with a total of 15 weekly flights.

Dublin will serve Oslo and Copenhagen with a total of four weekly flights.

In other news, Norwegian’s traffic figures for July shows a continued increase in the number of passengers. Demand is driven by ease in travel restrictions, in addition to a higher level of the population being vaccinated. In July, Norwegian operated 33 aircraft, which is approx. 50 percent more than the previous month. For the coming autumn and winter season, the number of aircraft and routes will gradually be increased to meet anticipated market demand.

In July, 695,830 passengers flew with Norwegian, which is approx. 50 percent more than at the same time last year. Compared with July 2020, the total capacity (ASK) has increased by 104 percent and passenger traffic (RPK) up 124 percent. The load factor in July was 74.4 percent, an increase of 7 percentage points compared with last year.

Travel to Northern Norway has been especially popular this summer, and the company increased its capacity to the northern parts of Norway to meet this demand.

Norwegian closes its long-haul network, Gatwick jobs at stake, will focus on Europe and 737s

Norwegian has made a major decision to shut down its long-haul Boeing 787 Dreamliner network and concentrate on short-haul operations from Europe with this announcement:

Norwegian’s Board of Directors has outlined a simplified business structure and dedicated short haul route network. With this plan, Norwegian can build a robust and solid company that will attract investors and continue to serve new and existing customers.

Norwegian has long been recognized as an industry leader in low cost travel, winning numerous awards. The company will build on this foundation, focusing on its core Nordics business, operating a European short haul network with narrow body aircraft. The airline will continue to meet its customers’ needs by offering competitive fares across a broad range of domestic routes in Norway, across the Nordics and to key European destinations.

“Our short haul network has always been the backbone of Norwegian and will form the basis of a future resilient business model,” said Jacob Schram, CEO of Norwegian.

The current plan is to serve these markets with around 50 narrow body aircraft in operation in 2021 and to increase that number to around 70 narrow body aircraft in 2022. Furthermore, Norwegian targets to reduce its debt significantly to around NOK 20 billion and to raise NOK 4 – 5 billion in new capital through a combination of a rights issue to current shareholders, a private placement and a hybrid instrument. The company has received concrete interest in participation in the private placement. Norwegian has recently reinitiated a dialogue with the Norwegian government about possible state participation based on the new business plan.

The COVID-19 pandemic has profoundly affected the entire aviation industry. 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. The consequence of this decision is that the board of directors of the legal entities employing primarily long haul staff in Italy, France, the UK and the US have contacted insolvency practitioners. Norwegian will continue to assess profitable opportunities as the world adapts and recovers from the impact of COVID-19.

Customers with bookings affected by the future changes in our route network will be contacted directly and will be refunded. The examinership and reconstruction processes undertaken in Ireland and Norway will continue as planned, and the plan presented today is subject to approval by the Examiner and Reconstructor, support from the creditors and subsequently court approval.

Norwegian Air Shuttle aircraft photo gallery:

Norwegian Air Shuttle aircraft slide show:

Norwegian commits to reduce CO2 emissions by 45 percent by 2030

Norwegian Air Shuttle made this announcement:

Norwegian has launched a new environmental sustainability strategy that will begin immediately and deliver several industry leading targets. Cutting CO2 emissions by 45 percent, remove all non-recyclable plastics and recycle all single-use plastics are key commitments in the new strategy. The goal is in line with the 1.5°C target set forth in the Paris Agreement.

Jacob Schram, CEO of Norwegian, said: “At Norwegian we take our responsibility towards the environment seriously, and that is why we must look to the future and implement a strategy that produces immediate and tangible benefits for the environment today. Norwegian will continue to instigate a positive change across the industry in this field that will benefit not only the environment but also our customers and our business. The low-cost business model is the sustainability model as it enables efficient energy and resource management.”

Will require 500 million litres sustainable aviation fuels

To limit global warming to 1.5°C, carbon emissions must be reduced by 45 percent by 2030 compared to 2010 levels, according to the International Panel on Climate Change (IPCC, 2018). We commit to improve the carbon efficiency of our operations and will reduce our carbon emissions by 45 percent per passenger kilometer (RPK) by 2030 – compared to 2010 levels. This will be achieved through both fleet renewal and sustainable aviation fuels.

The airline commits to utilising between 16 and 28 percent sustainable aviation fuels by the end of the decade, depending on the level of fleet renewal. The target amounts to up to 500 million litres sustainable aviation fuels by 2030.

To achieve this important goal, it is also crucial to get in place a regulatory framework that actively rewards carbon efficiency and increases both the production and use of sustainable aviation fuel.

Jacob Schram said: “We encourage producers to ramp up production of sustainable aviation fuels. Norwegian will be actively engaging with producers to kick start this vital contribution to the industry and take advantage of the emission savings that these fuels offer.”

Will remove all non-recyclable plastics

Initial elements of the sustainability strategy will also include a 100 percent reduction of non-recyclable plastics and 100 percent recycling of single-use plastics by 2023.

Anders Fagernæs, Norwegian Head of Environmental Sustainability, said: “More sustainable and smarter options are becoming a greater part of the considerations that customers make when choosing which airline to fly with. We will champion this attitude and become the customers sustainable choice by reducing and recycling plastic waste, promoting sustainable aviation fuel and continuing to fly one of the world’s youngest fleets to achieve a 45 percent reduction in CO2 emissions by 2030.”

A solid foundation

Norwegian is already one of the world’s leading fuel-efficient carriers due to its modern fuel-efficient aircraft. Norwegian was the first airline to sign the United Nations Framework Convention on Climate Change (UNFCCC) pledge, committing to become carbon neutral by 2050.

The airline was also voted the world’s most fuel-efficient airline on transatlantic routes in 2015 and 2018 by the International Council on Clean Transportation (ICCT) and since 2010 the airline has reduced its emissions by 28 percent.

Norwegian strongly affected by COVID-19 – 71 percent passenger decline, 8,000 furloughed or laid off employees and 140 grounded aircraft

Norwegian Air Shuttle reported its results for the first half year of 2020. The figures are as expected heavily impacted by the COVID-19 pandemic with a net loss of NOK 5.3 billion. During the first half of 2020, 5.31 million customers travelled with the company; a decrease of 71 percent compared to the same period last year. Norwegian successfully converted debt, gained access to state guaranteed loans of NOK 3 billion and conducted a public offering, in addition to implementing a series of cost-reduction measures. Still, Norwegian is facing challenging times ahead.

Before COVID-19, Norwegian had guided the market of a profitable 2020 and the best summer ever. Strict government travel advice and the following drop in customer demand forced Norwegian to ground 140 aircraft and furlough or lay off approximately 8,000 employees. In the second quarter, Norwegian only operated 7-8 aircraft on domestic routes in Norway. Following a successful restructuring process, the company gained access to the Norwegian government’s loan guarantee of NOK 3 billion and an additional NOK 0.3 billion from commercial banks.

“When we entered 2020, we were expecting a positive result and the best summer ever, thanks to successful cost-saving initiatives and a more efficient operation. Then we were hit by COVID-19 and customer demand literally stopped from one day to the next, as government-imposed travel restrictions and travel advice were introduced world-wide. For the past months we have been working tirelessly to make sure that we can emerge from this crisis as a stronger company, well-positioned for future competition. Some of these measures have been painful, but totally necessary if we are to make it through at all. Creditors, bondholders and shareholders have shown us support and trust to find a way forward for the company and our customers are expressing their strong support, for which I am grateful. And not least, I am extremely proud of all our Red Nose Warriors who are keeping up a positive spirit,” said CEO Jacob Schram.

During the first six months of 2020, 5.3 million customers travelled with Norwegian, compared to 18.1 million during the same period previous year. Production (ASK) was down by 69 percent and passenger traffic (RPK) decreased by 72 percent. The load factor was 78.2 percent, a decrease of 6.5 percentage points compared to the first half of 2019. Both load factor and production are adjusted according to the government mandatory blocking of middle seats on domestic routes in Norway in the second quarter of 2020.

Punctuality was at 87.2 percent, an improvement of 7.3 percentage points compared to the first half of 2019.

Poor visibility creates uncertainty ahead

On July 1, Norwegian reopened 76 routes, put an additional 15 aircraft into service and brought more than 600 employees back to work. The market is still highly uncertain, mainly due to changing travel advice from governments across Europe. As the government changes its travel advice, demand is immediately impacted. Going forward the company will continue to adjust its route portfolio in line with demand and government travel advice.

“The COVID-19 crisis has impacted aviation and the travel industry particularly hard, and most companies need government support to survive. We see that many of our main competitors receive considerable liquidity support from their governments as aviation represents the backbone of infrastructure. We are thankful for the loan guarantee made available to us by the Norwegian government which we worked hard to obtain. However, given the current market conditions it is not enough to get through this prolonged crisis,” Schram said.

 

Norwegian finalizes recapitalization and secures state aid

Norwegian Air Shuttle has made this announcement:

Norwegian confirms that the restructuring is completed and that the state loan guarantee of in total NOK 3 billion has been approved. The company has now converted NOK 12.7 billion of debt to equity and laid a solid foundation for the future, although the next months will remain challenging.

“I want to thank everyone who has supported the company during this unprecedented crisis that has affected the entire the airline industry: The Government and Parliament; customers; employees: shareholders; leasing companies; creditors; bondholders, the travel industry and other Norwegian supporters. Now that we can access the state loan guarantee, we can continue to transform the company. Through this process, the belief in New Norwegian and the company’s strategy have been confirmed by shareholders, the market, bondholders, leasing companies, other creditors and lenders. Nevertheless, the months ahead will remain challenging and with a high degree of uncertainty for the industry. Norwegian will still need to collaborate closely with a number of creditors as the company currently has limited revenues,” said CEO Jacob Schram.

Since the end of 2018, Norwegian has taken significant actions to restructure its operations and return to profitability. The company was on the path to deliver a positive net profit in 2020, and this summer was set to be the strongest in the company’s history. Instead, the coronavirus outbreak and global travel restrictions has led to a substantial drop in demand.

The Company has seized this time as an opportunity to restructure and develop a new strategy and business plan – New Norwegian – for a strengthened airline to re-emerge when travel restrictions are lifted and demand returns.

“In addition to securing that the company survives this crisis, our goal has been that Norwegian should have a strong position in the future airline industry, with a clear direction and strategy. This will ensure sustainable operations and a structure that will be to the benefit of both shareholders, customers and colleagues,” says Schram.

Norwegian Air Shuttle aircraft photo gallery:

Norwegian Air calls for a special meeting on May 4 to discuss its future

Norwegian Air Shuttle (Norwegian Air) is basically in hibernation as its plans its future. The beleaguered airline has called for a special meeting on May 4, 2020.

At that meeting, the management of the company is expected to present a new restructuring plan that will see a much smaller airline if approved. Creditors will be asked to exchange debt for equity.

The company is also planning a hibernation phase that will last until next winter.

Read more from Forbes.

Norwegian aircraft photo gallery:

Norwegian’s pilot and cabin crew companies in Sweden and Denmark file for bankruptcy

Norwegian Air Shuttle has made this announcement:

Due to the ongoing spread of the Coronavirus (COVID-19) most countries have advised against or have banned non-essential travel. The closure of borders and quarantine restrictions has effectively brought the entire airline industry to a halt. Consequently, almost all of Norwegian’s flight operations have been cancelled, while the costs for air crew remain. The pilots and cabin crew in Scandinavia are employed in subsidiaries in the Norwegian Group.

Unfortunately, despite the measures that the company has already taken to reduce costs, the Board of these companies are left with no choice but to apply for bankruptcy.

The decisions about filing for bankruptcies in the four crew subsidiaries were made by the respective boards on Monday April 20, 2020.

”The impact the Coronavirus has had on the airline industry is unprecedented. We have done everything we can to avoid making this last-resort decision and we have asked for access to government support in both Sweden and Denmark”, said CEO of Norwegian, Jacob Schram.

“Our pilots and cabin crew are the core of our business and they have done a fantastic job for many years. It is heart-breaking that our Swedish and Danish pilot and cabin crew subsidiaries now are forced to file for bankruptcy, and I’m truly sorry for the consequences this will have for our colleagues. We are working around the clock to get through this crisis and to return as a stronger Norwegian with the goal of bringing as many colleagues back in the air as possible,” Schram said.

In Norway, there are efficient furlough opportunities which means that the government pays for all salary related costs throughout the duration of the furlough period. Unfortunately, there is not the equivalent coverage in Sweden or Denmark schemes.

Despite the measures that the company has already taken, coupled with the lack of significant financial support from the Swedish and Danish governments, we are left with no choice.

The Board of the below companies in the Norwegian Group on April 20, 2020 decided to file for bankruptcy:

Norwegian Pilot Services Sweden AB

Norwegian Pilot Services Denmark ApS

Norwegian Cabin Services Denmark ApS

Norwegian Air Resources Denmark LH ApS

Due to the extraordinary situation (force majeure), Norwegian has also notified OSM Aviation that it has cancelled the crew provision agreements with several of its jointly owned OSM Aviation subsidiaries. These companies have crew based in Spain, UK, Finland, Sweden and the US.

The above actions will affect 1,571 pilots and 3,134 cabin crew. About 700 pilots and 1,300 cabin crew based in Norway, France and Italy are not affected.

The process of the subsidiaries filing for bankruptcy is now being managed by bankruptcy courts and bankruptcy trustees in the respective countries.

Video:

Norwegian to cancel 85 percent of its flights and temporarily layoff approximately 7,300 colleagues

Norwegian Air Shuttle made this announcement:

The COVID-19 situation is escalating by the hour and due to stagnating demand and enforced travel restrictions by authorities worldwide, Norwegian will gradually cancel most of its flights and temporarily lay off a major share of its workforce.

“What our industry is now facing is unprecedented and critical as we are approaching a scenario where most of our airplanes will be temporarily grounded. Several governments in Europe have already said that they will do everything they can to ensure that their airlines can continue to fly when society returns to normalcy. We appreciate that the authorities of Norway have communicated that they will implement all necessary measures to protect aviation in Norway, consequently securing crucial infrastructure and jobs,” said CEO Jacob Schram of Norwegian.

Norwegian has already discontinued a significant number of its flights and the main priority this week is to maintain as many scheduled flights as possible to ensure that customers are able to immediately return to their home destinations. The company will also work closely with the authorities to arrange flights for the benefit of stranded passengers, if necessary. Customers who are directly affected by route changes and cancellations will be contacted by Norwegian via text message or e-mail.

“We understand that this extraordinary situation is stressful for our customers, but I want to assure everyone that we are working around the clock to ensure that everyone is taken care of in the best way possible at this time,” said Schram.

As a result of most of the company’s planes being parked, Norwegian unfortunately has to temporarily lay off more than 7,300 colleagues in total which equates to approximately 90 per cent of its workforce, which includes pilots, cabin crew, maintenance and administrative staff. The layoff procedures vary from country to country and Norwegian’s team is already in constructive dialogues with union and HSE representatives at all its locations across the network.

“It is indeed with a heavy heart we have to temporarily lay off more than 7,300 of our colleagues, but we unfortunately have no choice. However, I want to emphasize that this is temporary, because when the world returns to normalcy my goal is to keep as many of our dedicated colleagues as possible,” said Schram.

Norwegian’s route network changes

-Thousands of flights have already been cancelled.

-As of March 21, the company will primarily fly a reduced scheduled domestically in Norway and between the Nordic capitals. Some European flights will be operated. All intercontinental are cancelled except flights between Scandinavia and Thailand (last flights at end of March).

-All flights that will be operating will be available for sale on Norwegian.com.

-Limited schedule will remain in place until at least April 17 but will be reviewed on a regular basis in line with changes in travel restrictions and demand.

Norwegian will continue to share updates with its customers, the financial market and the media once new measures are implemented.

Detailed reduced schedule – starting March 25

Norway:

Oslo -Bergen/Stavanger/Trondheim: 4 daily departures

Oslo – Ålesund/Bodø/Evenes/Tromsø: 2 daily departures

Oslo -Alta/Kirkenes: 1 daily departure

OSL – Haugesund/Kristiansand/Molde: 1 daily departure

Oslo – Svalbard: 3 weekly depatures

Oslo -Stockholm/Copenhagen: 2 daily departures

Oslo – Helsinki: 4 weekly departures

Stavanger – Bergen: 1 daily departure

Bergen – Trondheim: 1 daily departure

Sweden:

Stockholm – Kiruna: 4 weekly departures

Stockholm – Luleå/Umeå: 2 weekly departures

Stockholm – Helsinki: 2 daily departures

Stockholm – Copenhagen: 2 daily departures

Stockholm – Oslo: 2 daily departures

Finland:

Helsinki – Kittilä: 6 weekly departures

Helsinki – Oulu: 1 daily departure

Helsinki – Rovaniemi: 1 daily departure

Helsinki – Oslo: 4 weekly departures

Denmark:

Copenhagen – Oslo: 2 daily departures

Norwegian Air Shuttle aircraft photo gallery: