MIAMI – Norwegian Air (DY) has reported today its results for the first half of 2020. These show the airline heavily affected by the impact of COVID-19.
According to its 1H 2020 report, the airline recorded a net loss of NOK5.3bn and a decrease of 71% in passenger numbers. During the period, DY also implemented a series of cost-reducing measures as part of its restructuring process.
Regarding its staff, the carrier furloughed or laid off around 8,000 employees. As for its fleet operations, it grounded 140 aircraft to operate only domestic routes with seven or eight jets.
Norwegian CEO, Jacob Schram said that these actions were painful, but “totally necessary” if DY were to make it through at all.
Norwegian Air Financial Support
As the company faced a successful restructuring process, it gained some liquidity. In balance, it received a NOK3bn from a Norwegian government loan guarantee and an additional NOK3bn from commercial banks.
Regarding this support, the airline said it was grateful to creditors, bondholders and shareholders.
During 1H 2020, DY only recorded 5.3 million passengers compared to 18.1 million carried in the same period in 2019.
In other numbers, the airline’s RPK went down by 72%, closely followed by an ASK drop of 69%. The load factor also had a plunge of about 6,5% to end up at 78.2%.
According to the carrier, both indicators were adjusted following the Norwegian government’s mandatory blocking of middle seats on regional routes. The measure became effective during the second quarter of the year.
A Different 2020 Prospect
For 2020, DY expected a positive result and “the best summer performance ever”, said Schram. This follows the airline’s cost-saving initiatives and more efficient operations for the period.
However, Schram explained that the COVID-19 spread worldwide and government-imposed travel restrictions changed the picture. Passenger demand, therefore, went down from one day to the next.
By July, the company had reopened 76 routes, put 15 aircraft into service, and returned at least 600 employees back to work. These operations remain under government travel advice.
Despite the official liquidity support, current demand conditions are still highly uncertain. Thus, Schram added that DY’s granted loan guarantee is not enough to get through this prolonged crisis.
The airline had already announced that it would maintain its fleet grounded until 2021 while it expected a full recovery for 2022.
Featured photo: Norwegian Boeing 787-8 Dreamliner. Photo: Juraj Patekar.