NEW YORK – Low-cost airline Norwegian Air Shuttle announced on January 14 that it will be cutting all its long-haul routes, including flights departing from the U.S. to destinations in Europe such as the New York to Athens route, Conde Nast (CN) Traveler reported, adding that the carrier will focus instead on its short-haul routes from Scandinavian countries to the rest of Europe in order to survive the global pandemic.
Norwegian Air Shuttle CEO Jacob Schram said in a statement, “Our short-haul network has always been the backbone of Norwegian and will form the basis of a future resilient business model,” CN reported, adding that “Schram noted the airline did not expect the long-haul market to recover from the COVID-19 crisis anytime in the ‘near future.’”
“Going forward, the airline will now serve the European and Nordic market with 50 narrow-body aircraft in 2021, with plans to operate 70 of the aircraft next year,” CN reported, noting that “Norwegian said that it would directly contact and refund all customers with long-haul bookings affected by the changes.”
Schram said, "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,” CN reported, adding that “in addition to raising capital from private investors, the airline has reopened negotiations with the Norwegian government about possible state-backed financial aid, which it was not granted earlier in the pandemic.”
According to Bloomberg, “refocusing the majority of its network to operate out of Norway could help secure the government aid,” CN reported, adding that “Norwegian government officials ‘had rejected an earlier bailout, partly because some of the aid would be used to fund the long-distance business focused on London’s Gatwick airport and wouldn’t benefit Norway.’”
London’s Gatwick “was indeed the airline's largest base in 2019, with nearly 1.1 million departure seats to long-haul destinations from the airport, according to numbers from data firm OAG analyzed by industry site RoutesOnline,” CN reported, noting that “the pivot also means mass layoffs for the airline's long-haul staff in the U.S., Italy, France, and the UK.”
Norwegian “was a pioneer in the long-haul, low-cost network, operating in a space that many saw as financially dubious,” CN reported, adding that “Scott Keyes, founder of Scott's Cheap Flights, said Thursday on Twitter that Norwegian helped usher in what he calls the ‘golden age of cheap flights.’”
Keyes posted on Twitter, “In 2014, Norwegian did something pretty revolutionary: long-haul budget flights. U.S.-Europe flights used to average $900+. Norwegian started selling them for $300. Before Norwegian, transatlantic flights were quite expensive because they faced no competition from budget airlines,” CN reported.
The low prices enticed many budget-conscious travelers, including many in the Greek community who traveled from New York to Athens with the carrier, taking advantage of the low transatlantic fares.
“At its peak in 2018, the carrier operated 52 routes between North America and Europe, according to RoutesOnline,” CN reported, adding that “out of the New York area alone, the airline offered flights to Amsterdam, Athens, Barcelona, Copenhagen, London, Oslo, Paris, Rome, and Stockholm.”
Prior to the pandemic, the airline also had plans “to launch nonstop flights from Chicago to Paris and Rome, and from Denver to Rome, in 2020,” CN reported
As Norwegian built a loyal following, it also went through some financial issues, and “teetered on the brink of bankruptcy several times, but has always been able to find a solution in the eleventh hour,” CN reported.
Norwegian’s “frequently weak balance sheets have been partially due to its push for rapid route expansion— one of the fastest-ever in the industry— and partially due to bad luck,” CN reported, noting that “repeated mechanical issues out of the airline's control hobbled its fleet, first with the engines on its Boeing 787 Dreamliners, which had to be grounded for repairs, then with its Boeing 737 Max planes.”
Some of those issues left Greek-American customers scrambling to find flights back to the U.S. from Greece in the summer of 2019. In dealing with those issues, Norwegian was “already vulnerable heading into the COVID-19 crisis,” CN reported.