Norwegian Air Introduces New Cost-Cutting Program To Avoid Bankruptcy
If last week’s news of Norwegian Air’s imminent bankruptcy and potential collapse ruined your holidays, this plot twist should boost your spirits in time for New Year’s. It was earlier reported that Norwegian Air was struggling to generate enough capital to stay above water, and that its famously cheap flights to Europe might be in jeopardy. In a statement on the Oslo Stock Exchange on Monday, however, the airline sought to dispel any rumors of shutdown by announcing “an extensive cost savings program, #Focus2019, which will contribute to estimated savings of minimum NOK 2 billion ($230 million) in 2019. Six weeks into the program, we have already identified significant savings.”
Norwegian hopes the new program will help it overcome some of the hurdles it has faced this year, including an issue with its Rolls-Royce engines, which caused its aircrafts to be grounded for repairs. This hiccup caused significant and widespread delays in operations, and contributed to Norwegian’s financial woes.
The #Focus2019 program will involve modifying or discounting certain routes, making adjustments to flight capacity, and other changes designed to “meet the competitive environment in a period with seasonally lower demand in Europe.” If the program is successful, Norwegian even hopes to order 200 new planes in the first half of next year, in addition to selling or refinancing some older planes to conserve revenue.
Another update will be given in April after the airline’s first quarter reports are in, but for now, it seems Norwegian will remain in the skies.
H/T: Travel & Leisure