A party of crew members coming off a Norwegian Air Shuttle flight were delayed in accessing their hotel rooms over concerns about payment. The hotel, a Copthorne near Gatwick Airport in London, reportedly demanded upfront settlement of the bill before rooms could be accessed. This comes amid widespread concern for the financial health of the airline.
Signs of financial stress
Many in the aviation world have been concerned for the future of long-haul, low-cost airline Norwegian. The airline has struggled financially for some time, cutting routes and showing signs of stress even before the COVID-19 outbreak.
However, with the current situation placing even more pressure on Norwegian, the airline has been forced to cut even more flights and to consider laying off staff. According to an announcement earlier this week, it could be forced to cut 3,000 departures up to mid-June, representing 15% of its total capacity.
Yesterday, there was a whole new type of market of financial difficulties for the airline, as reported in the Guardian. According to the report, crew members staying in a London hotel were refused access to rooms unless payment was made upfront, signaling a lack of trust in the airline to settle its bills.
Crew deplaning at London’s busy Gatwick Airport were booked to stay in the nearby Copthorne hotel overnight. However, the hotel delayed staff from accessing their rooms until advanced payment was made.
The Guardian was privy to a letter to airline employees which was issued by the hotel. In the letter, it said,
“We have requested your company, Norwegian Airlines, to supply us with advance payment for your accommodation.”
Reports suggest that the hotel is no longer demanding advance payments for rooms. Whether that’s due to action on Norwegian’s part is unclear, but the whole situation sounds like this particular supplier was feeling shaky about the airline’s standing as a liquid company.
Can Norwegian survive?
I’ve lost count of the number of times this question has been posed in the last 12 months, but it’s even more relevant today than it has been before. Now, Norwegian is facing dual headwinds, a deadly combination of poor financial status and high exposure to troubled markets.
Trump’s ban on US-EU travel will come as a huge blow to the carrier, which is largely reliant on transatlantic travel for its revenue streams. While it has, so far, managed to limp along despite what the analysts say, it’s no big secret that things don’t look too good right now.
While coronavirus took the blame for the collapse of Flybe last week, the carrier was struggling long before that. Just as those people with underlying health issues are most at risk from the virus, so too are those airlines with pre-existing financial issues going to suffer the most. Norwegian is precisely one such airline. Only time will tell if it can make it to the other side unscathed.