Beleaguered low-cost airline Norwegian says it has been forced to lay-off an additional 1,600 employees as a result of a decision from the government of Norway not to offer a second financial bailout that the airline says is crucial for its very survival. Since the beginning of the pandemic, Norwegian has laid-off 9,400 workers, leaving just 600 remaining after the latest round of lay-offs is completed.
Not all of the impacted employees have been made permanently redundant with government support schemes introduced specifically for the COVID-19 pandemic in a number of countries keeping workers in a furloughed status on reduced pay.
The airline lashed out at Oslo on Monday for refusing a financial bailout “while simultaneously imposing travel restrictions that actively discourage passengers from travelling.” Norwegian’s chief executive, Jacob Schram described the decision as a “slap in the face” and admitted the airline was “now facing a very uncertain future”.
But the government of Norway turned down Norwegian’s request for billions more Kroner because it was not a “sound use” of taxpayers money. Minister of Transport Knut Arild Hareide said more state aid could distort competition and would not benefit Norway in the longterm.
“Following today’s disappointing announcement from the government, we have no choice but to furlough an additional 1,600 colleagues and park 15 of the 21 aircraft we’ve operated the past months,” Schram said on Monday afternoon.
“Recently government-imposed travel restrictions have effectively stifled any hope of a stable and progressive recovery, Norwegian has been hit from all sides by factors outside of our control,” he continued. “This is a sad day for everyone at Norwegian and I sincerely apologise to all our colleagues that are now affected, but there is no other alternative.”
Norwegian will now keep just six aircraft flying on domestic routes across Norway. The airline said it expects to still receive financial support to keep these routes operating.
At the outset of the COVID-19 pandemic, Norwegian grounded almost its entire fleet and said the airline would go into hibernation mode for up to a year in order to preserve cash. As borders started to reopen in the summer, Norwegian ramped up its short-haul network but has since retreated back as a second wave of Coronavirus infections sweeps across Europe.
In the years preceding the pandemic, Norwegian had embarked on a daring strategy of rapid expansion, opening up bases across Europe, as well as in the United States and even opening up a domestic airline in Argentina. The strategy saddled Norwegian with debt and Schram had been brought onboard to slash costs and steer the airline back to profitability.
