Norwegian Air struggling

Tough flight to survival for low-cost carrier

Norwegian Air planeIn a further blow to tourism on the island, low-cost operator Norwegian Air seems to be struggling yet again in the face of COVID-19. More bad news on top of coronavirus virtually bringing tourism on the island to a halt, as the discounter has recently been a major provider of flights to Madeira, particularly during the summer months. Now it is slashing flights and staff amid new restrictions on travel between Europe and the U.S. and fears of the coronavirus pandemic.

As recently as last November the blog reported that the airline had had to be refinanced yet again, but now the Oslo-based carrier is cancelling 4,000 flights through the end of May as it faces a dramatic drop in demand due to the spread of the pandemic. As part its cuts, the airline will temporarily lay off at least half its workforce and park 40% of its long-haul fleet. The cuts at Norwegian follow the Trump administration’s decision to severely restrict travel between Europe’s Schengen Area, which does not include Ireland and the UK, and the U.S. for 30 days beginning today.

An airline data analyst on the BBC this morning observed that flights from the US to Europe in the first week of March were down 79% before Trump’s travel ban. Anecdotal evidence, he said, was that some airlines are currently receiving more cancellations than new bookings.

The FT report that Norwegian Air has stumbled from crisis to crisis in recent years. But the coronavirus-inspired fall in demand is the most serious test yet for Europe’s third-largest low-cost airline, which is especially exposed due to its high debt burden incurred through a decade of breakneck expansion.  Analysts are increasingly worried that it could breach its bond covenants or simply run out of cash.

The airline had big problems with the engines on its Boeing 787 Dreamliner aircraft in 2018. A few months later, it was further hurt when the same manufacturer’s 737 Max planes were grounded after two fatal crashes. Now the coronavirus has hit with full force, sending Norwegian’s shares down by almost three-quarters in the past month alone to their lowest level since 2005.

4 thoughts on “Norwegian Air struggling”

  1. The Azores will be effected as well by the lost of tourists as well economics. As the locals say Islands are heaven when it nice. They hell when it not.

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