Norwegian airline has announced an outline of a simplified business structure dedicated to short haul trips which will put 1,100 pilot and cabin crew jobs based at Gatwick Airport out of work.
The company, alongside others in the aviation industry, has continued to be “profoundly affected” by the impact Covid-19.
Travel restrictions and changing government advice has led to a negatively influenced demand for long haul travel, in which the airline’s entire Boeing 787 Dreamliner fleet has been grounded since March 2020.
The consequence of the group’s decision for short haul flights has led to the board of directors, who primarily employ long haul staff in Italy, France, the UK and the US, to contact insolvency practitioners.
The group’s current plan is to serve markets with around 50 narrow body aircraft in operation in 2021 and to increase that number to around 70 narrow body aircraft in 2022.
Furthermore, the airline said it plans on reducing its debt significantly to around NOK 20bn (£1.7bn) and to raise NOK 4 – 5 billion (£344m -£430m) in new capital through a combination of a rights issue to current shareholders, a private placement and a hybrid instrument.
Jacob Schram, CEO of Norwegian, said: “Our short haul network has always been the backbone of Norwegian and will form the basis of a future resilient business model. I am pleased to present a robust business plan, which will provide a new start for the company.
“By focusing our operation on a short haul network, we aim to attract existing and new investors, serve our customers and support the wider infrastructure and travel industry in Norway and across the Nordics and Europe. Our focus is to rebuild a strong, profitable Norwegian so that we can safeguard as many jobs as possible.”
He added: “We do not expect customer demand in the long haul sector to recover in the near future, and our focus will be on developing our short haul network as we emerge from the reorganisation process.
“It is with a heavy heart that we must accept that this will impact dedicated colleagues from across the company. I would like to thank each one of our affected colleagues for their tireless dedication and contribution to Norwegian over the years.”