MIAMI — Norwegian Air Shuttle CEO, Bjørn Kjos, has officially stepped down from the helm of one of the world’s most disruptive low-cost carriers after 17 years of tenure.
Kjos has been in command of the airline since 2002. He was appointed as Chairman, steering the company from its humble beginnings all the way to the global powerhouse that it has become today.
The long-haul/low-cost carrier grew from a small airline to a powerful market disruptor, launching routes on brand-new Boeing 787 Dreamliners at unseen costs, and becoming Europe’s third-largest budget airline.
Today, Norwegian has more than 11,000 employees and runs a strong fleet of more than 160 aircraft.
The carrier has also clinched some major milestones, becoming the number-one foreign operator in New York.
Growth While Turning Losses
But even though the airline has grown to a point of disrupting every market it has entered, it has failed to turn profits. Today, Norwegian is filled with billions of dollars of debt. The airline was forced to sell new shares during this year’s first quarter, looking for new ways of funding its business.
Last year, because of numerous engine woes with its Boeing 787 Dreamliner engines, the airline lost 1.45 billion kroner. And this year, the crisis accelerated with the worldwide grounding of the Boeing 737 MAX fleet, of which the airline has 18 units parked throughout Europe.
According to Norwegian, the expected loss during 2019 because of the plane’s grounding is around $80 million. And the airline confirmed yesterday that it’s expecting the plane to get back on the line at least until October.
Kjos had hinted during the airline’s second quarter financial report that he was overdue to retire. “You shouldn’t lead an airline past your 70s,” he said.
As the airline struggled to recover from precarious financial health, Kjos noted numerous times that once positive signs of recovery were attained, he would step down and remain as an adviser to the board.
“Norwegian’s Q2 results show that we are delivering on our strategy of moving from growth to profitability,” said Kjos before stepping down.
The airline notes that its key priority is “returning to profitability through a series of measures, including an optimized route portfolio and an extensive cost-reduction program.”
“Despite operational issues outside of our control, like the grounding of our 737 MAX fleet, we are delivering the highest second-quarter operating revenue in the history of Norwegian. I am also pleased with the booking figures for the coming months, especially on long-haul,” Kjos added.
Norwegian Air released that for the second quarter, “the total revenue was more than NOK 12 billion, an increase of 19% from the same period last year, primarily driven by intercontinental growth.”
Kjos Steps Down
With these improvements noted, Norwegian Air announced today that Kjos is to step down immediately, with current Chief Financial Officer, Geir Karlsen, becoming interim CEO until a proper replacement is appointed by the board.
The airline’s new boss will come into one of the world’s most difficult markets: the long-haul/low-cost airline segment.
Recent failures of neighboring carriers WOW Air, Primera Air, and Monarch, show that the extremely thin margins and increased competition will make it hard for Norwegian to succeed.
But one thing that Norwegian has, is a strong worldwide presence and an already established customer appreciation for its brand-new planes, quirky service, and overall affordable tickets.
Regardless of Norwegian’s future outcome, Bjørn Kjos will remain as one of the world’s most successful CEOs the airline industry has seen.