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Norwegian Air disposes of Argentinian subsidiary
Norwegian has sold its Argentinian subsidiary, Norwegian Air Argentina (NAA), to JetSmart Airlines as part of its ongoing efforts to scale back its operations and return the carrier to profitability.
JetSmart will assume NAA operations with immediate effect. It will continue to operate scheduled NAA flights from Buenos Aires Aeroparque airport amid an “integration” process, expected to take several months, which will phase out the Norwegian brand.
Over the next six months, Norwegian’s three Boeing 737 aircraft operated by BAA will be replaced by JetSmart’s Airbus A320 aircraft and will return to service in Europe.
Norwegian has stressed all scheduled flights will go ahead as planned, adding that as NAA operates solely within Argentina, the new agreement will now affect Norwegian’s long-haul flights between London and Buenos Aires, operated by the carrier’s British division.
The carrier has declined to disclose further details of the deal. All Norwegian’s NAA employees will be taken on by JetSmart with the exception of its Argentina-based call centre staff, who will remain with Norwegian to provide customer service to JetSmart’s operation in Argentina and to customers flying long-haul between Europe and South America.
“We’re taking necessary steps to return to profitability,” said Norwegian’s acting chief executive Geir Karlsen.
“Over the past few months, we have made important changes to our route network to ensure long-term profitability.”
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On NAA, Karlsen added: “Attaining satisfactory profitability for a relatively small domestic operation has proved difficult to achieve, given the overall situation in the country.
“While most of NAA’s costs are denominated in dollars, revenue is obtained in pesos only, and the sharp depreciation of the peso against the dollar has created a significant gap between costs and revenue.
“We believe the agreement we have signed with JetSmart secures a significant part of what we have built over these two years: continuity of the network and opportunities.
“It brings the two newest airlines in Argentina into a stronger combined entity that currently carries about 10% of the domestic market and will become the third-largest operator in the country.”
Estuardo Ortiz, chief executive of JetSmart, said the operation was committed “long-term” to Argentina and would aim to become the leading ultra low-cost airline in South America.
Ole Christian Melhus, NAA chief executive, added: “All our colleagues in Argentina deserve a word of recognition for their dedication and hard work.
“The past two years have proven eventful – not only have they built a fully-fledged airline from scratch, but they have also operated it to the highest professional standards.
“In doing so, they have earned for Norwegian the gratitude and respect of the Argentinian people.”
NAA took flight on 16 October last year, operating 20 daily flights across eight routes between Buenos Aires and Bariloche, Cordoba, Iguazu, Jujuy, Mendoza, Neuquen, Salta and Ushuaia, carrying so far just shy of one million passengers.
James Chapple
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