After Norway’s government rejected the plea for financial support, Norwegian Air announced lay-offs and a possible run-out of cash in the first quarter of 2021.
Norwegian reports grim 3Q results; to run out cash in 2021
On November 10, 2020, Norwegian Air Shuttle reported its third quarter results. During that period approximately one million passengers travelled with the airline, compared with 10.53 million during the same period the previous year. Production was down 94% and passenger traffic decreased by 96%. The company reported a loss of NOK 980 million (€92 million) in the third quarter.
“Our third-quarter results clearly show that the effects of the global COVID-19 pandemic continue to heavily impact our operations and financial position”, Norwegian’s chief executive Jacob Schram said in a statement.
Norwegian entered 2020 as one of the most vulnerable airlines in Europe due to its high debt levels. In August 2020, the airline already announced it would run out of cash in the first quarter of 2021 unless it secures fresh funds and support from the government.
“Sad day for Norwegian”: to keep only 600 staff & 6 planes
On November 9, 2020, Norway’s government disclosed it would not provide additional financial support to its largest airline, arguing that it would be too risky. After this decision, Norwegian Air announced it would lay off 1,600 staff, leaving just 600 people still working, down from a pre-pandemic 10,000.
“This is a sad day for everyone in Norwegian. I strongly apologize to the employees who are now affected, but we see no other way”, said Jacob Schram.
Norwegian will have its entire fleet of 37 Boeing 787 Dreamliners and most of its short-haul planes grounded. It will operate only 6 of its 140 aircraft, down from last month’s 21. Only 12 domestic routes will be kept.
“The goal is to keep six aircraft in operation on domestic routes in Norway, and I assume that Norwegian will also receive our share of the support for individual routes that the Ministry of Transport and Communications has announced”, outlined Schram.
Shares in Norwegian are down 99% since January, 2020, according to the Oslo Børs Benchmark Index (OSEBX).