Low-cost Norwegian Air Shuttle, currently under bankruptcy protection as it battles for survival, posted a record loss in 2020 due to the pandemic and massive writedowns, the company said Friday.
Placed under bankruptcy protection in both Ireland and Norway, the no-frills carrier posted a net loss of 23 billion kroner (2.2 billion euros) last year, or 15 times the loss registered a year earlier of 1.6 billion kroner.
Like other airlines, the company has been hard hit by the dramatic drop in air travel due to the Covid-19 pandemic.
But it also registered a mammoth impairment loss of 12.8 billion kroner in the fourth quarter to take into account the planned reduction of its fleet.
The company had 140 aircraft pre-pandemic, a number set to be slashed to 53 over the coming months providing Norwegian can find buyers, strike deals with leasing companies and cancel existing orders.
Teetering on the edge of collapse, the company is also trying to secure massive reduction of its debt from creditors, from around 67 billion kroner at the end of the third quarter to 20 billion kroner.
It hopes to emerge as a slimmer airline and has already dropped its long-haul operations — where it was a pioneer in the low-cost segment — to instead focus on the Nordic market.
Last year, the company registered just 6.87 million passengers, down 81 percent from 2019, while revenues plunged to 9.1 billion kroner from 43.5 billion a year earlier.
“2020 was an exceptionally difficult year for the aviation industry and for Norwegian,” chief executive Jacob Schram said in a statement.
“Now, we are doing everything we can to emerge as a more financially secure and competitive airline,” he said.
The company’s reconstruction processes in Ireland and Norway are on track, it said.
Norwegian Air Shuttle had grown to become Europe’s third-biggest low-cost carrier, revolutionising transatlantic travel in recent years by trying to extend the no-frills model to long-haul flights.
But the company racked up repeated losses, partly 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.