Troubled airline Norwegian starts ‘reconstruction process’

Even before the coronavirus pandemic, the carrier was losing money

Going places: a Norwegian Boeing 737 Max (Norwegian Air Shuttle)

The troubled airline, Norwegian, has made another legal move to try to ensure its survival.

The budget carrier last month began the “examinership” bankruptcy protection procedure in Ireland, where some of its aircraft are registered. It has now entered a “reconstruction process” in its home country.

Norwegian told the Oslo stock exchange it plans “a supplementary Norwegian reconstruction process which enhances the outcome of the Irish process with a view to resize its balance sheet”.

The airline’s chief executive, Jacob Schram, said: “The pandemic continues to have a negative impact on our business as travel restrictions remain.

“The development of vaccines is great news for the airline industry, and we look forward to welcoming more customers on board as travel restrictions are lifted.

“Our goal is to be a financially strong and competitive airline, with a new financial structure, a rightsized fleet and improved customer offering.”

The airline is continuing to fly a small fraction of its route network, focusing on domestic links in Norway – where it is engaged in a vicious fares war with Wizz Air.

In an apparent bid to damage its rival, the Hungarian carrier is cutting prices on the 700-mile route between Oslo and the Arctic city of Tromso to just £15, with some flights operating within five minutes of Norwegian’s departures.

In November 2020 Norwegian flew 95 per cent fewer passengers, with barely 4,000 customers each day. Measured by the industry standard of “route passenger kilometres,” operations shrank by 98 per cent.

On flights that did operate, fewer than half the seats were occupied.

But the airline claims forward bookings are improving. Mr Schram said: “We can see that people are slowly beginning to plan for their summer holidays. Now, we look forward to flying our customers home for Christmas.”

Even before the coronavirus pandemic began, Norwegian was loss-making – by an average of £3.70 per passenger during 2019.

Last year it was the third-largest airline at London Gatwick airport, behind easyJet and British Airways.

The airline’s frequent-flyer scheme, Norwegian Reward, is continuing as normal.