blog-bg

Norwegian Flights Run for Single Passengers in a Bid to Overcome Covid-19 Economic Losses

Posted on April, 13 2020 by Blueway Limited

As the Coronavirus holds the world in its deathly grip, airline companies everywhere are being forced towards new lows due to a lack of travellers. One of the hardest-hit countries in terms of aviation performance is Norway.

Many Norwegian airlines have been left grounded for weeks as global borders shut, preventing air travel. In particular, the country’s largest airline carrier and Europe’s third most economical airline – Norwegian Air Shuttle – has been the worst affected. Losses are accumulating at a tremendous pace, and now Norwegian Air Shuttle is resorting to single traveller occupancy flights. Many of the carrier’s flights have been found running for just one or at times, a handful of travellers, despite the costs involved.

Crisis puts Norwegian Air Shuttle in dire straits

Norway has been one of the slowest to respond to the Covid19 travel ban globally. Just until a few weeks ago, the Scandinavian nation continued to run its long-haul flights to North America and Europe. 

But in early March, US President Donald J Trump issued a travel ban restricting the entry of all non-citizens coming into the US from Europe. This effectively felled Norwegian Air Shuttle’s passenger rate almost by half.

Then, about a week after the US travel ban, the Norwegian Government initiated its own travel ban. The Government closed its borders, shut the airports and imposed a temporary ban on all foreigners coming into the country, as well as any traveler going out of Norway.

The two bans together have had a devastating impact on every Norwegian airline carrier. However, the effects have been worse for Norwegian Air Shuttle because of its Boeing debacle.

The airline carrier’s entire fleet is composed of Boeing 737s and Boeing 787s. After the crash of the two Max 737s, the carrier had to ground its existing 18 Max 737s. They also had to stop their order for 100 Boeing 737 MAXs – part payment for which had already been made. In addition to this, the carrier’s 29 Boeing 787-9s were plagued by engine trouble. Together, these challenges had significantly impacted the company’s 2019 profitability. With the Coronavirus, any hope Norwegian Air Shuttle had of overcoming the losses faded away.

Airline carrier resorts to single passenger flights to make ends meet

In an effort to pull itself out of its loss-making slump, Norwegian Air Shuttle has started providing short-haul flights for as little as one passenger. Most of these routes are intra-European routes that depart from overseas airports, and some are domestic flights.

The airline company has slashed 40% of its long-haul fleet and 25% of its European fleet to maintain its short-haul fleet and leverage whatever limited business it can generate at this time. The Norwegian Air Shuttle’s CEO Jacob Schram is also considering temporarily laying-off 90% of the staff to generate higher liquidity.

For the company, it’s a do or die situation. Its bleak financial prognosis makes it a terrible proposition for potential investors. Despite having received a USD$280 million bailout and a tax vacation from the Norwegian Government, the carrier is unable to pull itself out of the vortex.

For now, the single occupancy flights are the only money-making opportunity available for Norwegian Air Shuttle. Only time will tell whether the company will be able to survive the pandemic.

Comments are closed.