SHARE
COPY LINK

AIRLINE

Airline Norwegian quadruples losses in first half of 2020

Low-cost airline Norwegian Air Shuttle, which was struggling even before the Covid-19 pandemic paralysed the aviation industry, said Friday its losses quadrupled in the first half of 2020.

Airline Norwegian quadruples losses in first half of 2020
Photo: AFP

With a 71 percent drop in passengers, 8,000 employees either furloughed or cut, and 140 planes grounded, Norwegian has been hit hard by the coronavirus crisis which forced it into an unwanted “hibernation”.

“This is the biggest crisis in the history of aviation since World War II and that has of course affected us,” chief executive Jacob Schram said as he presented the earnings report.

Europe's third-biggest no-frills airline posted a net loss of 5.4 billion kroner (515 million euros) for the first six months of the year, compared to a loss of 1.4 billion a year earlier. In the second quarter alone, the company lost 1.5 billion kroner.

Norwegian has avoided bankruptcy thanks to a rescue package allowing it to convert part of its large debt into new shares, thereby meeting the Norwegian government's condition for it to receive guarantees worth three billion kroner.

“There is no doubt that… we will need more help… to get through the winter,” Schram said.

Norwegian's share price was down by seven percent in midday trading. The share has lost 97 percent of its value since the beginning of the year.

The company has also launched a capital increase — for the fourth time in two years — cut costs, placed its Swedish and Danish subsidiaries in bankruptcy, sold off aircraft, and cancelled an order for 97 Boeing airplanes — 92 737 MAXs and five 787 Dreamliners.

Sales for the first half fell by 65 percent, to 7.14 billion kroner.

The company used only seven or eight planes for Norwegian domestic flights for several months during the height of the pandemic, but reopened 76 routes as of July 1st and 20 aircraft are now in use.

While the company said it plans to gradually increase traffic, it does not expect operations to return to normal until 2022.

READ ALSO: Norwegian to restart 76 routes from next month

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

SAS

‘We agree to disagree’: Still no progress in marathon SAS strike talks

By lunchtime on Friday, talks between the Scandinavian airline SAS and unions representing striking pilots were still stuck on "difficult issues".

'We agree to disagree': Still no progress in marathon SAS strike talks

“We agree that we disagree,” Roger Klokset, from the Norwegian pilots’ union, said at lunchtime outside the headquarters of the Confederation of Swedish Enterprise in Stockholm, where talks are taking place. “We are still working to find a solution, and so long as there is still some point in continuing negotiations, we will do that.” 

Mats Ruland, a mediator for the Norwegian government, said that there were “still several difficult issues which need to be solved”. 

At 1pm on Friday, the two sides took a short break from the talks for lunch, after starting at 9am. On Thursday, they negotiated for 15 hours, breaking off at 1am on Friday morning. 

READ ALSO: What’s the latest on the SAS plane strike?

Marianne Hernæs, SAS’s negotiator on Friday told journalists she was tired after sitting at the negotiating table long into the night. 

“We need to find a model where we can meet in the middle and which can ensure that we pull in the income that we are dependent on,” she said. 

Klokset said that there was “a good atmosphere” in the talks, and that the unions were sticking together to represent their members.

“I think we’ve been extremely flexible so far. It’s ‘out of this world’,’ said Henrik Thyregod, with the Danish pilots’ union. 

“This could have been solved back in December if SAS had not made unreasonable demands on the pilots,” Klokset added. 

The strike, which is now in its 12th day, has cost SAS up to 130m kronor a day, with 2,550 flights cancelled by Thursday, affecting 270,000 passengers. 

SHOW COMMENTS