Norwegian reveals record annual loss for 2020

The embattled carrier’s operations were heavily impacted by the COVID-19 pandemic and associated travel restrictions

Low-cost carrier Norwegian recorded an annual loss of NOK 16.6 billion (£1.38bn) for last year after its operations were severely impacted by the COVID-19 pandemic and associated travel restrictions.

The company revealed that during the fourth quarter, an average of 15 aircraft were operational out of a fleet totalling more than 130. In the same period, Norwegian carried 574,000 passengers, a decrease of 92% compared to the same period in 2019. The load factors on these flights was 52.4% on average, a drop of 32.5 percentage points compared with the fourth quarter of the previous year.

Photo Aviation Image Network/Wizzard

Jacob Schram, CEO of Norwegian, commented: “2020 was an exceptionally difficult year for the aviation industry and for Norwegian. Consequently, the fourth-quarter results are as expected. Unfortunately, many of our employees are furloughed or have lost their jobs, partly due to the company’s decision to cease long-haul operations.

“Despite the difficulties the pandemic has caused, there is a great fighting spirit and engagement within the company, and together we will build new Norwegian when we exit the reconstruction processes. Now, we are doing everything we can to emerge as a more financially secure and competitive airline with an improved customer offering, and as soon as Europe begins to reopen, we will be ready to welcome more customers on board.”

Aviation Image Network/Simon Gregory
Photo Aviation Image Network/Simon Gregory

In January, the company announced it would permanently end all long-haul flying citing the operation as “not viable” and instead, would focus on its core short-haul network in Europe.

Norwegian entered examinership in Ireland – where 21 of its Boeing 737s are registered – and a reconstruction process in Norway.

According to a statement, both processes are “progressing as planned and are on track”. The company says the purpose of the procedures is to reduce debt, reduce the size of the fleet and make the company financially attractive to secure new capital.

Aviation Image Network/Bailey
Photo Aviation Image Network/BaoLuo

Norwegian targeting a reduction to its debt of around NOK 20 billion (£1.6bn) and to raise around NOK 4.5 billion (£370m) in new capital. Last year, the company reduced net interest-bearing debt by NOK 18 billion (£1.5bn), mainly through conversion to equity.

The newly restructured firm plans to operate with approximately 50 narrowbody aircraft this year. However, the ramp-up is dependent on the development of the pandemic, travel restrictions and government advice in key markets.