Low-cost carrier Norwegian Air announced this week that it is abandoning long-haul routes, opting to focus only on flights within Europe. Shaken by a serious financial crisis, the Norwegian company had suspended flights with the 787 Dreamliner jets since March, the beginning of the pandemic.
Due to the strategic change, Norwegian Air will return the 37 Boeing 787 Dreamliner leased to the long-haul network, concentrated in the Unite States, but which also included some destinations in Asia and South America.
“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,” explains a statement from the airline.
Bold strategy
Norwergian Air has been one of the airlines most affected by the drop in passenger demand on air travel. In December, the company saw a 94% reduction in the number of passengers transported.
The company, however, had already been affected by financial problems after undertaking a bold expansion by offering the low-cost model on international routes. But very low profit margins and the difficulty of dealing with unstable markets have made many flights in deficit.
In addition, Norwegian suffered setbacks with its fleet of Boeing jets, which had repeated problems, first with the 787, due to engine failures, and then with the 737 MAX, banned from commercial flights after two fatal accidents.
In the new business plan, the air network will be focused on Europe, which will be served by a fleet of 50 Boeing 737s in 2021 and which will be expanded to 70 aircraft in 2022.
The carrier, which unsuccessfully tried to get help from the Norwegian government, restarted a dialogue with the country’s authorities to establish possible state ownership. Norwegian Air currently has a debt of around $2.34 billion.
