MIAMI — Low-Cost Carrier Norwegian has announced it will be axing a number of routes in Europe, North America, and the Middle East from its network, including the closure of five bases.
The airline’s operating bases to be shut down are Palma de Mallorca (PMI), Gran Canaria (LPA), Tenerife (TCI), Rome-Fiumicino (FCO), Stewart (SWF), and Providence (PVD).
Even thoug the airline plans to shut down the FCO base, it said its long-haul flights will continue, removing the 737-based aircraft only.
Reportedly, these route and base cuts are part of the airline’s ongoing cost-cutting efforts, which aim to save up to $234 million. This program was announced during Dcember 2018.
Norwegian has yet to specify the number of jobs that will be cut following the closure of these bases. According to the airline, the cut backs are due to start in April, and will continue throughout 2019.
Over the past 18 Months, Norwegian has been struggling with its costs and growing pains. The rapidly-expanding airline has managed to penetrate numerous markets with predatory pricing and convenient route/timing. However, it seems as if this speedy growth came at a steep price.
Helga Bollmann Leknes, Norwegian Air’s Chief Commercial Officer (CCO) said that the airline “has reached a point where it needs to make necessary adjustments to its route portfolio in order to improve the sustainability and financial performance in this very competitive environment.”
Norwegian is also planning to cut its Edinburgh base, as well as transatlantic flights from Edinburgh and Belfast at the start of summer 2019–a cut that was announced at the end of summer 2018.
Accordingly, Norwegian will only axe its regional, intra-European flights operated by its fleet of Boeing 737-800 and MAX 8. The airline explained that “these aircraft are primarily used on European routes, but also some longer routes between Europe and the U.S. and Europe and the Middle East.”
A Good 2018 Rests Behind
Even though Norwegian reported a profit during the last quarter of 2018, the carrier is still struggling with it’s current route network boosted by a rapid expansion.
Last week, the airline announced that it logged its “highest ever passenger figures in a single year” in 2018, moving 37.34 million passengers—an increase of 13% compared to the previous year.
According to Norwegian, 2018 “was characterized by major investments, strong competition, and a high oil price”.
Last year saw the airline receive 25 new planes and launch up to 35 new routes, which were mainly between Europe and the US.
Also, South America became a newly welcomed destination, together with the opening of Norwegian Air Argentina, which launched flights in October between Buenos Aires and Cordoba. Argentina became the sixth domestic market in the Norwegian Group’s network.
This expansion also added 2,000 jobs across the globe as the carrier continues to position itself for further growth.
However, in 2019, the airline’s CEO, Bjorn Kjos said that “We have launched a series of cost-reduction measures to boost our financials in 2019 which will have an immediate and continued positive influence throughout the year.”
On Christmas Eve day, Norwegian unveiled a cost-saving program, which is designed to see the airline reduce its overall costs for the first half of 2019, and produce savings up to £180m.
Part of these savings will see the airline offer some early delivery slots to other airlines, as Norwegian deals with much lower than anticipated passenger demand across Europe during the third quarter of 2018.
Apparently, the closure of these bases is part of the program.