-
Norwegian
- IATA/ICAO Code:
- DY/NOZ
- Airline Type:
- Low-Cost Carrier
- Year Founded:
- 1993
- CEO:
- Geir Karlsen
- Country:
- Norway
Norwegian was fighting for survival even before the pandemic struck. It cut over 80 routes in 2019 alone, those that were unprofitable or didn't have sufficient potential given the need to save cash and change. But it wasn't enough. The carrier was a complicated, bloated, and insufficiently competitive mess.
COVID helped Norwegian
Speaking at Routes Europe in Norway, Norweigan's CEO, Geir Karlsen, was clear: "we could not have changed as much as we have if COVID had not happened." It was a vital lifeline in the wholesale change, reshaping, and restructuring of the carrier, which revolves around survival, flexibility, and being much more competitive.
As Karlsen said:
It was a massively difficult period for Norwegian. We are now rebounding well as a restructured company. We are now more competitive than we have ever been. [Aircraft costing 25-30% lower than previously helps with the latter.]
Norwegian posted a net loss in the first quarter of 2022, always a challenging period of the year with lower demand and lower fares, even before the pandemic and the war is considered. Still, Karlsen is upbeat: "If fuel was not so high now, we could be profitable in full-year 2022."
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Plans 90-100 aircraft in two years
Norwegian ended April with 61 operational B737-800s and B737 MAX 8s. Karlsen says it'll have 70 this summer, with 85 aircraft by next spring. That's significant growth in little time, especially given the major ongoing problems. And Sweden and Finland – two important countries for Norwegian – are among Europe's slowest countries to recover.
Commenting that it can have up to 100 aircraft with the current administration staff, providing an efficiency ceiling of sorts, Karlsen says Norwegian will have between 90 and 100 aircraft in the next two years.
It raises the obvious question of overexpansion. It somewhat contradicts Karlsen's assertion that Norwegian will grow "the proper way this time" as previously it was "too aggressive." There's an intriguing balance between a strong foundation, the need for cost and product competitiveness, and the need for scale.
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It'll fly outside the Nordics again
One of the many things that Norwegian changed was to revert to its Nordics core. This made huge sense: it was highly experienced in the area, it was strong, it was well known, and it was largely profitable.
According to OAG, Norwegian has 7.2 million seats for sale in the all-important third quarter of 2022 (July, August, and September). 100% are to, from, or within Norway, Denmark, Sweden, and Finland, against 77% in Q3 2019. As Karlsen said: "we now have a network we know, and that is profitable."
But things could yet change: "When we have 90+ B737s, we'll be flying outside the Nordics again." Karlsen clarified by saying, "I'm not saying we will, but we must consider it." And if it does, which is very probable, will it have learned the lessons that caused all the problems in the first place?
What do you make of it all? Give your thoughts in the comments.