The chief executive and co-founder of low-cost long-haul airline Norwegian has stepped down from his role with immediate effect but will stay on at the carrier in a newly created role as advisor to the chairman. The 72-year old Bjørn Kjos has led Norwegian as CEO since 2002 and was one of the co-founders of the airline in 1993. Chief financial officer, Geir Karlsen will step in as interim chief exec while a permanent replacement is found.
Kjos has been suggesting he was ready to step down as chief executive for a couple of years but was required to lead the airline through a particularly challenging period of financial uncertainty.
The news was announced on the same day that Norwegian presented its financial results for the second quarter. Norwegian described the period as “characterized by reduced growth and improved profitability” which is in line with the airline’s new strategy.
Norwegian reported a profit of nearly $10 million USD for the period – although this is significantly down on the $35 million profit the airline made in the same period in 2018. Norwegian says the worldwide grounding of Boeing 737MAX aircraft of which it currently has 22 in its fleet has so far cost it nearly $47 million and doesn’t now anticipate the MAX flying again until October.
By the end of the year, the 737MAX grounding could cost Norwegian as much as $82 million.
The airline also reported…
- Expects profits to surge in 2019 as cost-cutting measures take effect and the 737MAX comes back online.
- Talks on a joint venture are ongoing and a big announcement is expected within weeks.
- ‘Best case scenario’ is to take delivery of 6 Boeing 737MAX aircraft by the end of the year.
“Leaving the exciting future tasks to a new CEO and taking on a new challenge as an advisor, is a set-up I am very happy with,” Kjos said of his decision to step down today.
“I look forward to spending more time working on specific strategic projects that are crucial to the future success of Norwegian,” he continued.
In the last couple of days, Norwegian announced it would suspend flights between London and Las Vegas, as well as Stockholm and Orlando indefinitely. The airline also said 10 previously year-round routes would become summer seasonal only – affected routes include flights between London and Chicago, Copenhagen and New York JFK, and Boston to Paris.
Norwegian said the decision came after a “thorough” review of its long-haul network and the realisation that some routes were highly seasonal.