MIAMI – The COVID-19 pandemic claims one more victim, as Norwegian Air (DY) has just published its Fourth Quarter 2020 interim report.
As is the case for many other carriers, hit by travel restriction linked to COVID-19, Norwegian shows negative results for 2020 (Q4 2020 Interim report). DY posted a net loss of US$ 1.91bl (NOK 16.6bl) of which US$ 1.47bl (NOK 12.8bl) is due to impairment.
Operating expenses before leasing and depreciation show a reduction of 82% compared to last year’s same period.
Interest-bearing debt diminished by US$ 2.07bl (NOK18bl) mainly converted in equity.
Key Markets Heavily Impacted
The key markets for DY were heavily impacted by travel restrictions and the spread of COVID-19. Passenger figures – 540,000 passengers carried in 2020 – were down a hefty 92% compared to 2019.
In addition, the airline’s Available Seat Kilometer (ASK) decreased by 96% and revenue Passenger Kilometer (RPK) by 97%. The load factor showed a result of 52.4% with a reduction of 32,5% year over year.
The Reconstruction Process is on Track
The carrier’s current reconstruction process, underway in Norway, and the examinership being carried out in Ireland are on track. Their purpose is to reduce debt, resize the fleet and make Norwegian attractive to investors. The target is to reduce the debt to approximately US$2.31bn (NOK20bn) and raise between US$436m-577m (NOK4+-5bl).
Pandemic and travel restriction permitting, DY is focused on a strong Nordic and European market to be served by a reduced fleet of approximately 50 single-aisle aircraft.
An Exceptionally Difficult Year
Jacob Schram, CEO of Norwegian, said, “2020 was an exceptionally difficult year for the aviation industry and for Norwegian. Consequently, the fourth-quarter results are as expected. Unfortunately, many of our employees are furloughed or have lost their jobs, partly due to the company’s decision to cease long-haul operations.”
“Despite the difficulties the pandemic has caused, there is a great fighting spirit and engagement within the company, and together we will build new Norwegian when we exit the reconstruction processes. Now, we are doing everything we can to emerge as a more financially secure and competitive airline with an improved customer offering, and as soon as Europe begins to reopen, we will be ready to welcome more customers on board.”
Featured image: Luca Flores/Airways