In November 2020, Norwegian Air filed for bankruptcy protection. The company’s board of directors has today outlined a simplified business structure, and it no longer includes long haul flying.
In this post:
Norwegian won’t fly 787s anymore
Norwegian’s entire Boeing 787-9 long haul fleet has been grounded 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 haul network is no longer viable. This means Norwegian will no longer be pursuing long haul flying, and will get rid of its Boeing 787s.
Unfortunately this also means that the legal entities employing primarily long haul staff in Italy, France, the UK, and the US, have contacted insolvency practitioners.
Norwegian says it will “continue to assess profitable opportunities as the world adapts and recovers from the impact of COVID-19. Given that the airline wasn’t making money on long haul flying pre-coronavirus, I have a hard time imagining this will return.
Norwegian will dump its 787 fleet
Norwegian will focus on European network
With its new simplified business structure, Norwegian will focus on its European operations. The hope is “to build a robust and solid company that will attract investors and continue to serve new and existing customers.”
The company will focus on its core Nordics business, operating a short haul network exclusively with narrow body aircraft. The focus will be on routes within Norway, across the Nordics, and to key European destinations.
The plan is to serve these markets with around 50 narrow body aircraft by 2021, and to increase that number to around 70 narrow body aircraft by 2022.
Norwegian is targeting to reduce 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 also once again started a dialogue with the Norwegian government about possible state participation on the new business plan.
Norwegian will focus on its European network
This development is inevitable but sad
I have two different takes here.
First of all, for consumers this is a sad development. Norwegian probably offered the best passenger experience of any low cost carrier across the Atlantic — the 787s were modern, had wifi, and had a solid premium economy product. This was a real value-add across the Atlantic for consumers, too bad it wasn’t equally beneficial for the company. 😉
Even for those who didn’t actually fly with Norwegian, there’s no denying that Norwegian contributed to fares across the Atlantic being lowered.
Then there’s the other point — Norwegian is hanging on by a thread. The airline was struggling even pre-pandemic, and the company has been on the verge of liquidation more times than I can count. At this point the company’s ownership structure has completely changed, and the company has a massive amount of debt.
So while this is a sad development, I guess I’ve been expecting for months that the company may very well not survive at all, let alone that it would operate long haul flights.
Operating 50-70 planes with a focus on the Nordics in the next couple of years still seems optimistic, so we’ll see how that plays out.
Norwegian Air’s 787 premium economy
Bottom line
As part of its new business plan, Norwegian Air will be abandoning its long haul operations, and also getting rid of its 787s. These planes haven’t flown for nearly a year now, and the airline knows that if it’s going to survive, long haul flying isn’t part of that business model. Norwegian will instead focus on flying within Europe, with a particular focus on the Nordics.
Are you sad to see Norwegian cut long haul flying?
I flew Norwegian transatlantic three times, and every time had a great experience. One return flight was up front in premium, and I remember it being a fantastic trip.
I'll really miss the crazy sight of the male flight attendants all taking their seats, receiving a call on the intercom headset, and then pulling on their leather flying (?) gloves in unison. I never did figure out why, but I loved it.
Norwegian was my go to airline for flights to and from the US & Europe. Plus they also flew to Bangkok and Buenos Aries.
I follow a few of their flight attendants on Instagram and so many people have lost their jobs; pilots, flight attendants, ground crew, catering, etc. I feel sorry for them all, because their staff was always efficient, polite, happy, and very attractive (even though the males had to wear the one...
Norwegian was my go to airline for flights to and from the US & Europe. Plus they also flew to Bangkok and Buenos Aries.
I follow a few of their flight attendants on Instagram and so many people have lost their jobs; pilots, flight attendants, ground crew, catering, etc. I feel sorry for them all, because their staff was always efficient, polite, happy, and very attractive (even though the males had to wear the one size too small plaid blazers)
My last trip from Europe before the pandemic was TAP from Lisbon to Miami, and it was a bargain at $275 USD OW. So someone will fill the void. Not everyone can afford over $1,000 each way for a transatlantic flight in off season.
Some people in the comments are saying BA must be delighted by this news.
Well, what most people won’t be aware of... Norwegian’s exit from the longhaul market may surprisingly pose a particular headache for British Airways.
It removes another competitor to the existing BA / American Airlines transatlantic joint venture. This is not good news as it will mean greater scrutiny in 2024 when the Competition and Markets Authority revisits the existing agreement.
Luckily...
Some people in the comments are saying BA must be delighted by this news.
Well, what most people won’t be aware of... Norwegian’s exit from the longhaul market may surprisingly pose a particular headache for British Airways.
It removes another competitor to the existing BA / American Airlines transatlantic joint venture. This is not good news as it will mean greater scrutiny in 2024 when the Competition and Markets Authority revisits the existing agreement.
Luckily for BA, JetBlue has plans to enter the transatlantic market later this year.
Sad to see them end service to the US. I last flew them LAX to Rome in late 2019. The plane shown on the Tarmac (the "Roald Amundsen") is the same plane. I hope they can restructure successfully and one day return to international routes.
@ Shannon Kline
If i was you i would make a claim with your credit card company anyway despite already agreeing to accept points.
If it got to a stage in the claim where Norwegian said hey we gave her points id think the credit card company would agree what good are the points now if you don't fly transatlantic anymore.
@Patrick F
The Norwegian government sold its shares in SAS in 2018. The Swedish and Danish governments own a total of around 30 % of the stocks, the rest is privately owned.
The airplanes are still registred in all three countries (four actually, as SAS has an Irish subsidiary), and SAS stil has a large operation in Norway. The Norwegian government has tended to favourize Norwegian, though.
@Noah Bowie
I don’t think so. LGW is a buyer’s market right now, and IAG already has more of it than it needs. It was never interested in Norwegian as a concept, only in removing a competitor that threatened to undermine it. But that’s no longer a threat.
Like most airlines now, IAG has more planes and more slots than it can use for the foreseeable future. Why would it spend money on buying a bankrupt competitor?
No Name said "SAS is Swedish and Danish government owned."
Has SAS ownership changed? I worked for them in Seattle until they closed that station. At that time, Norway also had ownership and each plane was registered in any one of the 3 Scandinavian countries...some in each country, in other words.
I would not be surprised if the ever opportunistic IAG offered to take over Norwegian's long haul operations and in particular their Gatwick base under the guise of preserving jobs. That might just work in their favour and potentially even get them in the government's good books possibly leading to some governmentassistance. Would they be willing to take on the challenge of massively growing their operations during a pandemic whilst another even larger acquisition is...
I would not be surprised if the ever opportunistic IAG offered to take over Norwegian's long haul operations and in particular their Gatwick base under the guise of preserving jobs. That might just work in their favour and potentially even get them in the government's good books possibly leading to some governmentassistance. Would they be willing to take on the challenge of massively growing their operations during a pandemic whilst another even larger acquisition is ongoing. Maybe. While I'm not a big fan of IAG management I can't deny that they know how to run a business well. And if they see an opportunity to remove a competitor they will definitely take it. Norwegian is no longer a competitor but there is a gap in the market that will one day need to be filled and you can bet your bottom dollar that IAG will want to be the company that does fill it. Somehow I thought it would come to this. Norwegian walked away and all IAG had to do was sit and wait. Then when Norwegian began to crumble they'd try to get their hands on as many of the pieces that made Norwegian an attractive takeover target in the first place. Rising to the top of the pile was the Gatwick hub.
Good riddance. DY was a ridiculous, pointless business model that had failure written all across it. Sure, if you had no bags to check and didn't want a glass of water, the tickets could be had on the cheap, but for the most part, DY fares on TATL flights were identical to the legacy carriers. It was bleeding cash in what is likely to have been the last boom of the industry for a while...
Good riddance. DY was a ridiculous, pointless business model that had failure written all across it. Sure, if you had no bags to check and didn't want a glass of water, the tickets could be had on the cheap, but for the most part, DY fares on TATL flights were identical to the legacy carriers. It was bleeding cash in what is likely to have been the last boom of the industry for a while (2019). Sorry to see jobs and livelihoods lost but this airline was a fantasy riding on a binge of debt.
@Indy, did you get your refund? If so, how long did it take?
That's really sad. They were my go-to for one-way, affordable, daytime flights from New York to London (which I utilized surprisingly often for work).
Bummer. One of the only direct flights to Europe from my home airport (MCO). If you could get the premium economy on saver it was a steal and even a normal prices it was still cheaper than any other premium economy flying over the Atlantic.
I’m sure SOME DAY MCO will get more EU routes. Just kidding. LOL
They did lower transatlantic fares and offered some unique routes, but of course they also caused legacy carriers to introduce transatlantic basic economy in order to compete with their base fares. That can sometimes be a negative now for winter fares that were always cheap, where you're left paying $100-$200 more just to have a choice of seat and checked bag. I have no issue with domestic basic economy for 2 - 4 hours, but...
They did lower transatlantic fares and offered some unique routes, but of course they also caused legacy carriers to introduce transatlantic basic economy in order to compete with their base fares. That can sometimes be a negative now for winter fares that were always cheap, where you're left paying $100-$200 more just to have a choice of seat and checked bag. I have no issue with domestic basic economy for 2 - 4 hours, but it is harder for many to travel long distance for numerous days (especially in winter where heavier clothing is needed) without a checked bag. And unless you're a true nonchalant person, it is nice to be able to guarantee avoiding a middle seat if flying solo without paying a premium.
The biggest loss as many have said is cheap one-way tickets to pair with a J award tickets. There are few carriers left offering that.
@ Jo Mamma,
I can agree that the business model was troublesome, but your pricing is not accurate. I (thankfully) only purchased the outbound flight (LAX-Gatwick). The total cost was $ 2,024.00 for 2 Premium seats and 2 LowFare seats. Looking at BA and AA right now. Four (4) Premium Economy tickets is $ 3450 right now. That's almost a $ 1,500 difference on one leg alone...plus we loose the semi-reclined seats. That's why we...
@ Jo Mamma,
I can agree that the business model was troublesome, but your pricing is not accurate. I (thankfully) only purchased the outbound flight (LAX-Gatwick). The total cost was $ 2,024.00 for 2 Premium seats and 2 LowFare seats. Looking at BA and AA right now. Four (4) Premium Economy tickets is $ 3450 right now. That's almost a $ 1,500 difference on one leg alone...plus we loose the semi-reclined seats. That's why we could afford to fly to Europe. $ 3K is a big deal to us. Very sad.
So here's a question...my daughter had tickets last June to France on Norwegian. They (Norwegian) cancelled due to Covid (obviously) and offered them either a) points for a future flight or b) reschedule. She and her friends took the points.
Aaaaannnnd...now we have points equal to 4 trans-Atlantic roundtrip tickets for an airline that doesn't fly out of the U.S. and is in bankruptcy. We can't be the only ones in this situation.
...
So here's a question...my daughter had tickets last June to France on Norwegian. They (Norwegian) cancelled due to Covid (obviously) and offered them either a) points for a future flight or b) reschedule. She and her friends took the points.
Aaaaannnnd...now we have points equal to 4 trans-Atlantic roundtrip tickets for an airline that doesn't fly out of the U.S. and is in bankruptcy. We can't be the only ones in this situation.
Anyone have any deep thoughts? Chargeback still/yet an option? All 4 tickets went on my CC...
ugh.
@Jo Momma/ @Dwayne Carter - I understand where you're coming from, but the real point is that it costs more than Norwegian were charging to get you to/from Europe. Norwegian was in its pre-pandemic state an airline that created a cheap travel "bubble" financed with cheap debt/equity - they've not been profitable since they started LH services. As others have pointed out, once you added basic services to their few cheap fares you'd end up...
@Jo Momma/ @Dwayne Carter - I understand where you're coming from, but the real point is that it costs more than Norwegian were charging to get you to/from Europe. Norwegian was in its pre-pandemic state an airline that created a cheap travel "bubble" financed with cheap debt/equity - they've not been profitable since they started LH services. As others have pointed out, once you added basic services to their few cheap fares you'd end up paying similar or more than flying on BA, AA, VS etc. They should have taken the IAG offer years ago and might have had some protection from the inevitable headwinds once they arrived.
Boeing screwed them over every step of the way.
I hope so Jo Momma. They were my only ticket over to Europe. The "Big 3" are just unbelievably expensive.
This really blows. I have flown them several times across the Atlantic from FLL to the U.K. and Scandinavia for what averaged $600 us per person. Can't beat that especially if you are in a brand new Dreamliner. I wonder if anyone else will fill that void??
If it wasn't for the pandemic i'd argue that TUI would snap up a few of the 787s- Would have helped fill the long haul gap left by Thomas Cook and keep costs low as they already operate the type. Now the pandemic, its anyones guess.
I wonder if La Compagnie is next. It would be a shame for them to collapse.
I wonder who will pickup their used 787s?
Very sad day for me and my family. We just booked our trip to LON for Oct 2021. Now I've got to try and get the $$ back. Very sad day for our family.
so sad. i loved norwegian and their fun routes. would have never visited bergen if not for their direct flight from stewart - what a fun long weekend in Europe, and the tickets were like $120.
"Operating 50-70 planes with a focus on the Nordic in the next couple of years still seems optimistic, so we’ll see how that plays out."
Well, this is how Norwegian managed to grow, and probably where they should have stopped. The Norwegian domestic market is strong, and basically a duopoly, and they have many enthusiastic followers in Norway. The Norwegian/Scandinavian home market is affluent, and they have built up a solid following flying from Scandinavia...
"Operating 50-70 planes with a focus on the Nordic in the next couple of years still seems optimistic, so we’ll see how that plays out."
Well, this is how Norwegian managed to grow, and probably where they should have stopped. The Norwegian domestic market is strong, and basically a duopoly, and they have many enthusiastic followers in Norway. The Norwegian/Scandinavian home market is affluent, and they have built up a solid following flying from Scandinavia to European destinations - serving tourists and snowbirds, e.g. to the Canary Islands.
@sam
I hate to be the one to point this out but bleeding money selling seats below cost is not innovative its the airline industries default position
@Endre
Not sure why you get the Jet Airways vibes?
Different scenarios, there was no takeover of another failing airline leading to high debt levels in Norwegians case. Granted both airlines had CEO that suffered from hubris when it came to take over the world.
The big difference is that Norwegian has a functioning home market to fall back on, and no government owned competition in their biggest market. SAS is Swedish and Danish government owned.
@nikojas
Some B787's have already been sold/returned to leasers, think they were down to 35+ before this.
I was scheduled to fly premium economy in august from LGW-ORD. While Norwegian dragged their feet in offering a refund, I’m so glad that I could push them to offer cash vs points or a voucher. I’m not sure that two 600€ vouchers would do me much good these days, even with my EU passport.
I predict that these used 787s might go to AirNZ or Qantas if reconfigured or a low cost carrier such as Jet2 if not.
With Q/NZ it would replace their ageing large wide bodies. And for the coming post pandemic years, the a380/777 flagships might be too big for Oceania. Especially as their governments are considering quarantine long into next year even post vaccination.
@ Andy - TAP still (at least in early 2020) offered reasonable one way TATL flights. I, too, have booked a biz seat to Europe with points and then flew one-way home via LIS, even taking advantage of a few day stopover.
This is the worst for redemptions on other airlines. I used to love flying business to Europe and hopping on a one way Norwegian flight back. Now people will have to book both ways with points.
Am I the only one who gets Jet Airways vibes?
This is sad. Slots are going to open up at JFK, probably at least 6 or 8. Wonder who is going to want them?
Maybe spirit or United?
Norwegian used to be pretty good European airline with plenty of flights to different Norwegian airports. When they went longhaul, they reduced their network in Europe and you had to change in Oslo to get to smaller airports in Norway. Hopefully, they will go back, to being excellent local airline.
I never considered them for TATL flights, their offer was too budget and you had to pay for everything. After adding all the options,...
Norwegian used to be pretty good European airline with plenty of flights to different Norwegian airports. When they went longhaul, they reduced their network in Europe and you had to change in Oslo to get to smaller airports in Norway. Hopefully, they will go back, to being excellent local airline.
I never considered them for TATL flights, their offer was too budget and you had to pay for everything. After adding all the options, price was similar to non-budget airlines which could offer you re-routing in case of cancellations and delays, etc.
Unless some airlines or leasing company wants to buy the 787, I guess Norwegian can find a good "solution" with Boeing.
"Buy our 787s and we will be a little less angry regarding the 737 MAX planes that have been grounded forever."
This is a real pity. What an innovative airline they were, finally presenting a cheap, cheerful, comfortable alternative to the major airlines.
Sad, but inevitable. BA must be thrilled.
How many 787s did they have and what might happen to them? Is there any airline right now looking for 2nd hand long haul aircraft?
Norwegian Airs’ planes looked like flying condoms.
That said, they and the long-haul competition they spurred will be missed.
I wonder if this means JetBlue will get all the slots at Gatwick it wanted? It's a shame Norwegian are gone but JetBlue will fill the void and do things a hell of a lot better i.e make profit! The main area Norwegian will be missed is one way fares, these were a fraction of the cost compared to legacy carriers, hopefully JetBlue will also fill this void!
What about their A321LR Order?