Norwegian air mulls Irish registries to cut costs

Budget airline Norwegian Air Shuttle said on Thursday that it is considering registering future long-haul aircraft in Ireland to circumvent Norwegian laws which bar the carrier from hiring cheaper Asian cabin crews.

Norwegian air mulls Irish registries to cut costs
File photo of a Norwegian Air Shuttle Boeing 737-800: Deanster1983

Europe's third largest low-cost carrier has sent a letter to Norway's Civil Aviation Authority asking it to authorize "renting an aircraft that in all likelihood will be registered in the Irish Aircraft Registration Department".

The contents of the letter, seen by business daily Dagens Naeringsliv (DN), were confirmed to AFP by company spokesman Lasse Sandaker-Nielsen.

The new aircraft would operate on Norwegian's recently announced routes to Thailand and the United States.

To ensure competitive fares on the new routes, the company wants to hire staff in Asia for a fraction of the cost it is now paying in Scandinavia, but earlier this year Norwegian authorities ruled out making any changes to the existing framework.

The airline has responded by brandishing the possibility of registering eight future Boeing 787 Dreamliners abroad, adding to union allegations that it is practicing social dumping.

"A final decision has not been made yet," Sandaker-Nielsen said.

Norway airline carriers can only operate aircraft registered in another country on a temporary basis, and unless the rules are changed Norwegian would eventually have to register its entire long-haul subsidiary in Ireland, DN wrote.

Sandaker-Nielsen also said the company expects to take delivery of its first Dreamliner in June, almost two months behind schedule following problems with the planes' batteries that now appear to have been resolved.

Norwegian has previously said it would lease two Airbus A340s from Portugal's HiFly to avoid delaying the launch of its New York and Bangkok flights.

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Scaled-down Norwegian Air exits bankruptcy protection

Low-cost carrier Norwegian Air Shuttle emerged from bankruptcy protection on Wednesday following a massive restructuring that included a vast fleet reduction and dropping its long-haul business.

Scaled-down Norwegian Air exits bankruptcy protection
A Norwegian Air Shuttle Boeing 737. Alan Wilson Flickr

In financial difficulty even before the arrival of the Covid-19 pandemic – which aggravated its problems further by paralysing global air traffic – Norwegian was in December placed under bankruptcy protection in Ireland, where several of its subsidiaries are based, and in Norway.

With its creditors and aircraft leasing companies, the company has negotiated a reduction of its debt and financial obligations by between 63 and 65 billion kroner (6.2-6.4 billion euros, $7.5-7.8 billion), to between 16 and 18 billion kroner.

READ ALSO: Norway taps oil wealth to cushion Covid impact

In addition, Norwegian, once Europe’s third-biggest low-cost airline, has also dropped its loss-making long-haul business, cancelled many of its aircraft orders, slashed its fleet from 156 to 51 planes, and raised six billion kroner in a new share issue.

It is also expected to have reduced its number of employees from around 10,200 at the end of 2018 to some 3,300 by the end of the restructuring, according to financial news site

With its restructuring plan approved by Norwegian and Irish courts, the company can now emerge from bankruptcy protection.

“It’s a relief to be a normal airline again,” chief executive Jacob Schramvtold reporters at a press conference.

Norwegian said Wednesday in a statement it has liquidity of seven billion kroner.

“This war chest can keep us afloat long after summer next year,” Schram said.

“We are strong enough to cope with a total reopening of society,” he told news channel TV2 Nyhetskanalen.

But the company, which has had just nine aircraft in operation since December 2020, continues to operate at a loss.

In the first quarter, when it transported just 210,000 passengers, the company posted a pre-tax loss of 1.19 billion kroner, compared to a loss of 3.29 billion a year earlier.

Now focused on Europe and in particular the Nordic countries, Norwegian plans to have 70 aircraft in operation next year, when travel is expected to resume as the pandemic wanes.

The company’s share price, which has been highly volatile of late, was up by almost 30 percent on Oslo’s stock exchange in midday trading.