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
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?