MoreSpecial Report: Norwegian ‘needs lower cost base’

Norwegian Air is finalising cuts to its flying programme for this winter and next summer as the carrier struggles with the high fuel price and engine problems with its long-haul fleet.

Geir Karlsen, Norwegian chief financial officer, confirmed: “We are evaluating the whole route programme – long-haul and short‑haul. Winter will be challenging market-wise and with the fuel prices we see. We will take out routes that are not performing.”

The capacity reductions will come in the first months of 2019. Karlsen said: “We will make decisions in the next weeks.”

The carrier will also announce “an adjusted summer [2019] programme” this month, a Norwegian spokesman confirmed.

Karlsen acknowledged: “We are struggling with our on-time long-haul performance – much of it engine-related. We have experienced issues with the Rolls-Royce engines on our [Boeing] 787s [and] that looks like continuing.”

The airline has paid “significant amounts” in compensation to passengers for delays and cancellations, he said, adding: “We will pay close to NOK1 billion (£95 million) by the year end.”

Karlsen added: “We are struggling with high oil prices. We initiated an internal cost-saving programme to save NOK2 billion (£190 million) in 2019.”

He conceded Norwegian has yet to finance the new aircraft it has due for delivery in the first half of next year. The airline is looking to shed up to 140 aircraft and shift its future aircraft orders to a leasing company which it hopes to set up with a joint-venture partner.

Karlsen joined Norwegian in April 2018. He insisted: “We have a meticulous focus on cost reduction.”

MoreSpecial Report: Norwegian ‘needs lower cost base’