Norwegian Posts Large 2018 Losses, Will Cut Fleet and Routes in 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 has been in financial trouble for some time now, and things were getting so serious that the airline had to issue a statement denying rumors that it would shutdown by the end of 2018. On Thursday it released its financial reports for last year, and the numbers still don’t look great.
In 2018, the carrier reported a net loss of 1.5 billion Norwegian kroner ($175 million USD). Norwegian did report a net profit of $155 million in the third quarter of 2018, but it wasn’t enough to help the low-cost carrier who posted a $209 million loss in 2017. This is despite the fact that it carried 13% more passengers and increased revenue by 30% over 2017s numbers.
Norwegian says it has a path to profitability including a cost cutting program that it announced at the end of last year. It plans on delaying the delivery of some 787s this year, expecting to take just 5 new aircraft by the end of 2019, which would bring its long-haul fleet to 37 aircraft.
“Going into 2019, we will enter a period of slower growth and fewer investments, while constantly looking for new and smarter ways to improve our efficiency and offer new products and services to attract new customers,” said Chief Executive Bjorn Kjos.
“The demand for traveling with Norwegian has been satisfactory, and advance bookings have been acceptable entering the first quarter of 2019,” Kjos said.
A rescue by IAG, the conglomerate that owns British Airways, Iberia and more, was called off when it announced it had no interest in buying Norwegian and would actually be selling off its 4% stake in the company. Norwegian’s turned to shareholders to raise an additional $350 million to help keep itself solvent.
Financial troubles aren’t the only issues the budget airline has to contend with — one its pilots union in Spain is now threatening to strike if it doesn’t get clarity on the future of the airline.
“Norwegian must be clear about our future, and we will not hesitate to mobilize if necessary, as the discontent and uncertainty in our group is increasing every day,” the Sepla pilots’ union said, reports the Financial Times.
“Such warnings, which have not been communicated to the company in any formal manner, are far from constituting a strike notice according to Spanish law, and therefore the company cannot comment further,” a Norwegian spokesperson told the Financial Times.
H/T: Travel Weekly
Featured image by Victor / Flickr.
Welcome to The Points Guy!
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.
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases.
- 2X points on dining at restaurants including eligible delivery services, takeout and dining out and travel & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 2x total points on up to $1,000 in grocery store purchases per month from November 1, 2020 to April 30, 2021. Includes eligible pick-up and delivery services.