In turmoil since the end of 2018, the low-cost carrier Norwegian Air has finalised its restructuring plan. The carrier wants to emerge from bankruptcy protection before the end of March. The carrier went bankrupt in November 2020 under the Irish Protection Act. This law is similar to what exists in the United States under the name of "Chapter 11". A law used by many American airlines.
The strategy for a restructured Norwegian Air includes urefocusing on Scandinavia and the total disappearance of long-haul air routes. According to Jacob Schram, CEO of Norwegian, "flights to the US and Asia were no longer viable because future demand remains very uncertain. We do not expect this demand in the long-haul sector to recover in the near future".
The long-haul subsidiaries in the United Kingdom, the United States, Italy and France should therefore be made bankrupt.
Refocusing on Scandinavia
The debt burden will be reduced and new shareholders are expected to join the capital. On the other hand, the restructuring of the network, which has been cleaned up of long-haul traffic, will put the company at a disadvantage.The focus on routes linking Scandinavia to the rest of Europe. " Our short-haul network has always been the backbone of Norwegian and will form the basis of a resilient future business model.Jacob Schram commented at the presentation of Ireland's plan to emerge from bankruptcy.
This withdrawal from Scandinavia will also mean the closure of short-haul bases in Spain and the United Kingdom. This reorientation could attract the goodwill of the Norwegian government towards Norwegian. The country had refused to help the carrier financially on a first occasion. But according to the Norwegian government, Norwegian's future repositioning could be viewed more favourably.
Norwegian plans to deploy 50 short-haul aircraft this year and 70 next year. Its fleet in the third quarter of 2020 officially stood at 140 aircraft, of which only 25 were still flying.
