Norwegian Air Shuttle, a pioneer in low-cost long-haul flights, said Thursday it would drop long distance routes and focus on Europe as it tries to restructure and avoid bankruptcy.
“The board today presented the company’s new business plan based on a simpler structure and a network of European routes with no long-haul,” Norwegian said in a statement, adding at a press conference that the move would affect more than 2,000 jobs.
Norwegian Air Shuttle, which had grown to become Europe’s third-biggest low-cost carrier, had revolutionised transatlantic travel in recent years by trying to extend the no-frills model to long-haul flights.
But the company racked up repeated losses, largely because of technical misfortunes. Its Boeing 777 Dreamliners encountered problems with their Rolls-Royce engines, and then its Boeing 737 MAX aircraft were grounded, as elsewhere in the world, after two fatal crashes.
At the same time, the company’s ambitious expansion programme saddled it with mountains of debt, totalling 66.8 billion kroner (6.5 billion euros, $7.9 billion) including liabilities, at the end of September.
In the red since 2017, the company’s woes deteriorated further with the Covid-19 pandemic which paralysed global air travel last year.
Out of a pre-Covid fleet of 140 aircraft, only six of its planes have been flying in recent months and the number of staff still on the job has fallen to 600, from 10,000 before the crisis.
The company has been placed under bankruptcy protection in Ireland and Norway to shield it from creditors while it tries to come up with a financial restructuring plan.
On Thursday, Norwegian said it wanted to reduce its debt to around 20 billion kroner, raise four to five billion kroner in capital, and have 50 aircraft in use this year and 70 next year.
Norwegian’s fate depends however on the outcome of negotiations with creditors.