Norwegian’s low-cost Argentina arm might be set to shut down, as rumors circulate about the Scandinavian giant’s exit from the market. The airline has removed any tickets for sale beyond March next year and maybe preparing to sell the airline itself to its local rival JetSMART.
What are the details?
Last year, Norwegian took advantage of the deregulation of the Argentina aviation market by opening its own airline in the country. They flew in one of their Boeing 737-800 from Europe to start flying low-cost routes in the country.
From there, the airline expanded to four 737s operating a countrywide route network to eight local destinations. The airport of Buenos Aires Aeroparque acted as its hub, and this was additionally connected all the way back to the mainline fleet by a Boeing 787 (cutting into British Airways profits who had long run the route as a monopoly).
But according to CH-Aviation, the airline is planning an exit from the country.
And the signs are all there.
- For one, the airline has removed the ability to buy tickets on its website from March 28th, 2020 onwards. This is the most telling indicator that the airline is not confident in the future of its operations.
- Additionally, the airline has also reduced its fleet from four Boeing 737s down to just three.
Back in April 2019, the Norwegian’s CFO and acting CEO did say that they would review operations of the Argentina route and, if it was not satisfactory, move to sell the airline.
Who would they sell the airline to?
As luck would have it, Norwegian might be able to pass on the airline and its airport slots to local rival JetSMART.
JetSMART is a low-cost carrier based out of Chile that is one of the Indio Partners affiliate airlines. Indigo Partners helps operate not only JetSMART but also Wizz Air in Eastern Europe, Frontier in the United States and Volaris, a Mexican low-cost carrier. The firm has a controlling interest in JetSMART and Frontier but is only a shareholder in the other two.
If JetSMART did buy Norwegian, the first thing they would do would be to move operations from Buenos Aires El Palomar (which has an evening curfew) over to Buenos Aires Aeroparque. It is not clear if the airline would take over the Boeing 737s operating in Argentina as JetSMART has an all-Airbus fleet.
Confirmation of a sale is expected by mid-December.
However, this may not be the case, as a Norwegian spokesman told Aviacionline, “at other times, we have also launched commercialization within a three- or four-month timeframe to adapt to seasonal changes in demand in Argentina and Europe, due to the inconvenience caused by the lack of single-aisle aircraft after the MAX delivery was disrupted.”
What do you think about this news? Should Norwegian sell to JetSMART? Let us know in the comments.