Low-cost carrier Norwegian has outlined a simplified business structure and dedicated short haul route network as it plans a return from the Covid-19 shutdown.
With this plan, the carrier said it hopes to build a “robust and solid company” that will attract investors and continue to serve new and existing customers.
The company said it would focus on its core Nordics business, operating a European short haul network with narrow body aircraft.
The airline will continue to meet its customers’ needs by offering competitive fares across a broad range of domestic routes in Norway, across the Nordics and to key European destinations.
“Our short-haul network has always been the backbone of Norwegian and will form the basis of a future resilient business model,” said Jacob Schram, chief executive of Norwegian.
The current plan is to serve these markets with around 50 narrow body aircraft in operation in 2021 and to increase that number to around 70 narrow body aircraft in 2022.
Furthermore, Norwegian targets to reduce its debt significantly to around NOK20 billion and to raise NOK4-5 billion in new capital through a combination of a rights issue to current shareholders, a private placement and a “hybrid instrument”.
The company said it had received “concrete interest” in participation in the private placement.
Norwegian has recently reinitiated a dialogue with the Norwegian government about possible state participation based on the new business plan.
“I am pleased to present a robust business plan today, which will provide a new start for the company.
“By focusing our operation on a short haul network, we aim to attract existing and new investors, serve our customers and support the wider infrastructure and travel industry in Norway and across the Nordics and Europe,” said Schram.
The Covid-19 pandemic has profoundly affected the entire aviation industry.
Travel restrictions and changing government advice continue to negatively influence demand for long haul travel, and Norwegian’s entire Boeing 787 Dreamliner fleet has been grounded since March.
Future demand remains highly uncertain.
Under these circumstances a long-haul operation is “not viable,” Norwegian said, and these operations will not continue.
The consequence of this decision is that the board of directors of the legal entities employing primarily long-haul staff in Italy, France, the UK and the US have contacted insolvency practitioners.
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