Norwegian Air Will Cut Costs To Avoid Collapse

Following news that Norwegian could enter a financial crisis in as little as six days, Simple Flying has learnt that the airline has begun to cut costs. While this mainly involves restructuring and cost-cutting, reports also suggest that IAG are still interested. While IAG is still interested in the struggling airline, Simple Flying understands this would be for much less than they initially offered. Norwegian has already tried to sell some undelivered aircraft, while the airline has already cut some less profitable routes. Simple Flying takes a look at the measures proposed by Norwegian.

Norwegian
2019 has been a rough year for Norwegian. Photo: Norwegian

Why Are Norweigian Facing Collapse?

Reports state that the airline could be facing collapse as the new year starts. Following many factors which have caused poor financial performance of late, suggestions are that the airline is just days away from a full crisis. The crisis follows large aircraft acquisitions which have left the airline in “heavy debt”. A number of other recent factors haven’t helped much either. One of the airlines B737s is stranded in Iran while engineers try to figure out how to get around US sanctions. Additionally, the airline was forced to wet-lease an A380 during the B787 engine troubles. Norwegian had to hire the aircraft again following the recent Gatwick Airport disruption.

Norwegian
Norwegian is reportedly days away from a “full crisis”. Photo: Norwegian

What Is Norwegian Considering?

According to Reuters, Norwegian Airlines is considering some ways to cut costs and raise money. Among the measures touted includes route cuts. In total, the airline intends to:

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  • Refinance a B787 to raise US$30m in cash;
  • Cut poorly performing routes;
  • A $230m p.a. cost saving program which will have limited immediate effect;
  • Norwegian has also reached an agreement with Boeing regarding earlier B787 issues which will have a positive effect from Q1 of 2019.
Norwegian
Along with refinancing an aircraft, Boeing has reached an agreement with Boeing regarding 2018’s 787 issues. Photo: Norwegian

The airline confirmed in a press release that it had secured financing for all of its aircraft deliveries in the first half of 2019. Speaking about the agreement with Boeing, a statement said “Norwegian’s long-haul operation has been disrupted by challenges with the Rolls-Royce engines on the Dreamliners. The Company has now reached an agreement with Rolls-Royce which will have a positive effect from the first quarter of 2019. The commercial terms of the agreement remain confidential.”

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Speaking about selling off aircraft, a spokesperson added: “The process of divesting aircraft continues, and we experience significant interest in our existing fleet as well as future deliveries. The Company recently signed a letter of intent for the sale of two aircraft with delivery in the first quarter of 2019.”

Do you think Norwegian will survive into the new year? Let us know in the comments down below!

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Bedlam

I hope not

AF Kay

Norwegian is just not a well-run airline. Which other airline would cancel a flight, rebooked certain passengers to an earlier flight, all without any notification to the affected passengers, who were then left completely on their own? Have they not learned from the lesson of People Express Airlines?

John parker

I would like to object to the above comment due to my experience of travel from Dublin to Stuart airport.ny. the flight was very comfortable and the staff on board were first class .I and my friends use them as it’s easier to get in a coach at the airport for 20 dollars that will take you into NYC.

R.D. Porter

Norwegian is still an air disaster waiting to happen. They have management issues from the ticket counter to the boardroom and have had for at least five or six years. They have cheated customers by not compensating them for hotels, ground transportation, etc. when they postpone flights (and they postpone flights frequently). They use the least trained, least competent pilots (frequently Indonesian – because they are the cheapest). The Dream liners are nice but Norwegian does not properly maintain them. I had an outbound flight that was filthy – literally trash all over the floor of the cabin – and… Read more »

Andrew Bilbao

Mr. Porter: You are lying through your teeth. I have been flying Norwegian for almost 2 yrs now and I have never seen any of the situations you are so vividly describing. Although I would say they have a not very good on time performance. The planes are well kept, staff on board is friendly and never ever I have seen this issue of “Indonesian” pilots you are referring to.

Ian Jivk

Mr Porter… Your writing here is maybe for some other company. It clearly shows anger. I’ve been flying Norwegian oversees for half a dozen years now and I’ve been always happy with the crew, the plane and especially the pricing. I’m sorry to hear about financial troubles they are in, but they had the Dreamliners first and it was a game changer. Love that aircraft model. I hope they will survive the crisis which from time to time hits any airline..

Yvonne Cambuli

NORWEGIAN IS THE BEST AIRLINES OF ALL THE AIRLINES AND THE ONLY AIRLINES THAT HAS THE BEST AIRLINE STEWARDESS AND FRIENDLY STAFF AND THE CLEANEST PLANE I ONLY FLY WITH NORWEGIAN BECAUSE THEY THE BEST . 🌹

Anthony

Chill

Steen B Nielsen

I have had at leats 20 flights during 2018 with Norwegian, and every one has been first class, without any problems at all. I can only recommend the company. The are not the cheapest airline, but the best in the low price section.

Dee Carroll

I have flown Norwegian a few times & I have nothing but good to say about the experience. The staff were very friendly & professional. The flight was on time & comfortable. I hope they can restructure & continue on!

Michael Smith

My experience from Bangkok to Rome just before Xmas was exceptional. I travel a lot and from my experience I will definitely use this airline again and recommend them to fellow travelers. The staff were extremely friendly and competent. The plane was clean and looked new. No complaints at all.

robert

I’ve had the opportunity to fly Norwegian three times including the 787 – 900
CPH FLL
CPH LAX
LGW MCO 789

It’s a great airline great airplanes I
I really hope they make it

Henri van Eeghen

MY experience with Norwegian has been excellent, with the exception of a flight from Rome to JFK. There they used WAMOS ( a Spannish low cost substitute) and that was really a bad experience. The airplane was old and the entertainment on board non-existent. Unfortunately the staff didn’t really speak English either.

What I am concerned about is the amount of “non” information coming from Norwegian about their financial status. They are in serious problems and donot really inform there customers about it. You need to check the newspapers to find out

David Bowles

I have flown Norwegian for many years (2-3x/year) to and from Europe from my base in California. I have never had any problems with them, from an on-time point of view, or service or the quality of the planes. On the contrary, their 787-Dreamliners are superb, state of the art machines which deliver exactly what they promise: less jet-lag, better air quality, etc. Norwegian airfares are unbeatable in coach or Premium. I hope they not only survive but thrive, they deserve to.

M Finn

Like many airlines Norwegian have their issues.
They have grown at an incredible rate.
As with any business the banks/investors will lend an umbrella until it’s raining!!

Flyinstyle

I have flown Norwegian a couple times from LAX to Gatwick and everything was great. Ok so the their premium is not lie flat seats but for the cost I paid for my spouse and I to fly round trip, I could not even get one seat on a legacy carrier in premium economy. We flew on a beautiful 787, maybe the inflight movies were not the greatest but I will give up watching the latest stupid superhero movie, to have good pricing and non stop service. I just booked to fly LAX to Paris for a great fare in… Read more »

Pepe R

I’ve flown Norwegian 5x/year for 4 years from California to Europe and I still have to have a bad experience with them. 787 is fantastic, and Norwegian delivers just what I need: direct flights to my destination, great fares and not having to pay for crappy food. Their pricing structure completely make sense to me, just pay by the leg, pay for the services you use, and choosing these services is extremely simple through their app or the web. All these problems really sound like a sum of bad unlucky circumstances that are sort of unrelated with Norwegian modus operandi.… Read more »

Jody Collins

I love Norwegian! Wonderful crews, new planes! Low prices! What is not to love?!? I fly with them monthly and I have ONLY had WONDERFUL experiences!

Jeff OKeefe

I have used NAS many times last few years and it has been spot on for my tastes.
I am travelling 16 th January via Fll but have done so before.

Jorge

I have flown both in economy and business class with Norwegian in the past 12 months and not only the planes were new and clean, the crew (flight crew and Cabin crew) were exceptional. There of course from time to time some minor bad experiences due to delays but nothing worst or better than other low cost airlines would experienced. All these fuss on putting/stepping down Norwegian Air are just propaganda to try discredit Norwegian Air by these potential take over company like IAG, so they can get a cheaper price buying a great potential airline like Norwegian, so I… Read more »

paul docherty

We are really impressed with NA . Hope they survive . We use the route Gatwick to Buenos Aires , no complaints at all . Also , just used NA’s new internal airline operating in Argentina , Buenos Aires to Bariloche Patagonia return . Fantastic . I am sure another well known UK airline is not happy with the America’s routes competition …. !!
Just look at the air fares .

Rob

I think the emotional comments are getting mixed up. I personally believe Norwegian Air offers a high level of service. However, the article is not about service levels or how clean the planes are. The issue is they are on the brink of financial collapse. Sadly, some of these problems seem to be beyond their control. It does seem their management have been reckless in the clocking up massive debt to create a new fleet. I hope Norwegian does survive against the odds.

Bob

NA is my airline of choice, I use them for travel from Gatwick to Scandinavia and USA. The service has always been very good, the aircraft clean, the staff very friendly and efficient, no problems with the infotainment system. I have suffered the occasional delay from Gatwick, but that has always been due to the airport organisation rather than NA. I can only hope the management can resolve the current financial problem, so that I can look forward to many more flights with NA.

Scott gowen

I fly from Boston to gatwick on several occasions and have found the staff great, the flight cost effective and love the fact the the older carriers now have to compete on all levels. The premium flight from gatwick to florida is the same cost as a coach flight on virgin or BA. The low cost flights from providence Rhode Island to several airports in Ireland and Scotland is a game changer. Summer flights booked in advance can be a great advantage for a large family looking to travel to and from Europe and America for the summer. Competition is… Read more »