Norwegian Air has confirmed it will end all long-haul operations and focus instead solely on short-haul flying as it seeks to emerge from a prolonged restructuring effort.
While the Covid crisis has pushed Norwegian to the brink of failure, the airline on Thursday (14 January) outlined a "simplified business structure" built around a "dedicated short-haul route network", designed to attract existing and new investors.
The airline’s entire fleet of Boeing 787 Dreamliner aircraft has been grounded since March 2020, and Norwegian says there is no immediate prospect of there being sufficient long-haul demand for this to change owing to the "profound" effects of the Covid pandemic, the subsequent travel restrictions and ever-changing government advice.
"Future demand remains highly uncertain," said the airline on Thursday. "Under these circumstances, a long-haul operation is not viable for Norwegian and these operations will not continue.
"The consequence of this decision is that the board of directors of the legal entities employing primarily long haul staff in Italy, France, the UK and the US have contacted insolvency practitioners."
In the UK, this process will be overseen by KPMG. It will affect Norwegian’s UK crewing entity Nar UK, which is based at Gatwick and employs the airline’s long-haul pilots and cabin crew.
The UK served as Norwegian’s long-haul hub; around 1,100 UK-based roles are likely to be impacted, all staff who have been furloughed since April.
Another 1,150 roles will be affected across Norwegian’s long-haul operations in France, Spain, Italy and the US, where it has also engaged insolvency practitioners.
Norwegian UK, the carrier’s UK airline, is not subject to insolvency proceedings and will remain dormant, leaving the door open for "profitable opportunities" in the post-Covid travel world.
“Our focus is to rebuild a strong, profitable Norwegian so that we can safeguard as many jobs as possible," said Norwegian chief executive Jacob Schram.
"We do not expect customer demand in the long-haul sector to recover in the near future, and our focus will be on developing our short-haul network as we emerge from the reorganisation process.
"It is with a heavy heart that we must accept that this will impact dedicated colleagues from across the company. I would like to thank each one of our affected colleagues for their tireless dedication and contribution to Norwegian over the years.”
Anyone with bookings affected by Norwegian’s proposed changes to its route network will be contacted directed and refunded.
With regards to its short-haul aspirations, Norwegian said it would seek to build on its "industry leading" reputation for offering low-cost travel.
It will focus initially on its core Nordic business, flying a number of Norwegian domestic routes and Nordic routes, and offering flights to "key European destinations"
A Norwegian spokesperson confirmed to TTG its operations would include flights to and from the UK.
“Our short-haul network has always been the backbone of Norwegian and will form the basis of a future resilient business model,” said Schram.
Norwegian expects to operate around 50 narrow body aircraft this year, rising to around 70 in 2022 as demand returns.
It also proposes to cut its debt "significantly" to around NOK 20 billion (£1.7 billion) and raise an additional four to five billion krone (£350-£430 million) in new capital through a rights issue to existing shareholders and a new private placement, for which Norwegian says it has received "concrete interest".
It has also approached the Norwegian government about "possible state participation" in its operations.
Schram aded the new business plan "would provide a new start for the company".
"By focusing our operation on a short-haul network, we aim to attract existing and new investors, serve our customers and support the wider infrastructure and travel industry in Norway and across the Nordics and Europe," he said.