Long-troubled Norwegian Air reported another large operating loss this week but also a new plan aimed at keeping it from having to ask shareholders for even more capital. It may anger passengers holding reservations this winter.
New CEO Geir Karlsen aims to head off more losses by cutting flights when demand is low. Staffing of both pilots and cabin crew is likely to become more seasonal, with the airline geared to suddenly cancel flights and leave aircraft parked if not enough seats have been filled.
Newspaper Dagens Næringsliv (DN) reported Wednesday how the plan will likely involve either seasonal contracts for pilots and cabin crew or regular furloughs when passenger demand is light. While October bookings were promising, Karlsen said, “November and February are the two worst months of the year.”
“You’ll see that even though we have more aircraft in operation (51 at present), we will take down production in the most difficult periods,” Karlsen said. “We’ll fly the planes less and make adustments in the course of the day.”
Flights can be cut on very short notice if bookings suggest that can help prevent “burning up cash” as the airline continues to emerge from the pandemic. It emerged from bankruptcy in May, immediately landed in a public relations nightmare because of large bonuses paid to Karlsen and other top executives, but then had a fairly good summer.
“I really don’t think Norwegian’s bottom line is most affected by summer traffic but by winter traffic,” Karlsen said during a presentation of the airline’s second quarter results on Tuesday. He and his colleagues managed to obtain new and more reasonable aircraft leasing agreements that offer more flexibility, allowing the airline to park jets in the winter and pay for them only when they’re in use. Scheduled flights may be cut by as much as 30 percent.
Parking aircraft and cancelling flights at the last minute can disrupt travel plans for passengers. Karlsen is more concerned about preserving cash and stemming losses. Representatives of cabin personnel told DN they expect to be kept informed about any staffing cuts. Pilots representatives didn’t immediately respond to requests for comment on turning pilots into seasonal workers.