Norwegian drops Argentina unit, hires former JetBlue exec amid restructuring

Dec 4, 2019

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Norwegian Air continues to restructure its business with a deal to sell its subsidiary in Argentina and exit that country’s domestic market. The move comes less than a week after Norwegian dropped long-haul flying from two of its Nordic bases.

The Oslo-based carrier has sold Norwegian Air Argentina to Chilean low-cost carrier JetSmart Airlines, Norwegian said Wednesday. JetSmart will immediately take over operations of the three Norwegian-owned Boeing 737-800s with plans to replace them with the JetSmart Airbus A320s in the next six months.

The deal will see the Norwegian brand exit the domestic Argentina market, which it has served since 2018. The airline’s separate long-haul arm will continue to serve Buenos Aires Ezeiza (EZE) with flights from London Gatwick (LGW).

Sign up for the free daily TPG newsletter for more airline news!

JetSmart, which is owned by private equity firm Indigo Partners that also owns Frontier Airlines, is a relative newcomer to South America’s skies. Launched in 2017, it only began flights in Argentina this April, though it has said it plans to double in size in the market by next April.

“As Norwegian moves from growth to profitability, we are taking all the necessary actions required to ensure that Norwegian is well positioned going forward,” said Norwegian’s acting CEO and chief financial officer Geir Karlsen in a statement on the deal. “Over the past few months we have made important changes to our route network to ensure long-term profitability.”

Some of Norwegian’s most notable recent route network changes have been in its transatlantic offerings. Flights from Copenhagen (CPH) and Stockholm (ARN) to the U.S. will not resume in 2020, nor will those between Ireland and North America.

Related: Norwegian Air drops U.S. flights from Copenhagen and Stockholm

Norwegian is also shaking up its executive ranks. The airline announced Wednesday that it has hired former JetBlue Airways executive Marty St. George as interim commercial chief as the airline’s senior management ranks continue to turn over. A new CEO, Jacob Schram, will take over the top spot in January.

The restructuring comes as Norwegian has long faced financial challenges in the face of rapid growth. Despite lowering fares for travelers and opening up the long-haul low-cost market between Europe and the U.S., the airline lost 1.45 million Norwegian kroner ($155 million) in 2018 even as revenues increased.

At the same time, many of Europe’s budget and leisure carriers have faced liquidity challenges that have forced the likes of Adria Airways, Thomas Cook and WOW Air to shut their doors this year. Norwegian has avoided a similar fate but not without its own struggles, and the departure of long-time CEO Bjørn Kjos in July.

JetSmart operated 14 A320 and one A320neo jets at the end of October, according to Airbus’ orders and deliveries. It has firm orders for another 56 A320neos and 26 A321neos.

Related: Norwegian Air CEO Steps Down as Struggling Carrier Charts New Direction

Featured image by Aas Erlend, AFP/Getty Images.

Chase Sapphire Preferred® Card

WELCOME OFFER: 60,000 Points

TPG'S BONUS VALUATION*: $1,200

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
Intro APR on Purchases
N/A
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.