The board of low-cost airline Norwegian has sacked its chief executive with immediate effect and replaced him with its chief financial officer who has been credited with rescuing the carrier from the brink of collapse.
On Monday, Norwegian said the airline’s board had voted to fire Jacob Schram, who had only been in the role since January 1, 2020, and replace him with Geir Karlsen.
Karlsen joined Norwegian as chief financial officer in April 2018 and briefly stepped into the role as chief executive Between July 2019 and December 2019 when Norwegian’s founder and former CEO Bjørn Kjos quit the airline.
He was, however, overlooked to permanently take on the role of chief executive in favour of Schram who had no previous airline experience during his 30-year career. Schram’s last position before joining Norwegian was at the Circle K gas station and convenience store chain.
Svein Harald Øygard, chairperson of Norwegian’s Board of Directors said Karlsen had the “trust and dedication that makes him the best choice as CEO of Norwegian” following the successful financial reconstruction of the airline.
“As travel bans now are about to be lifted, Norwegian stands ready to offer thousands of flights to our customers in the Nordics and abroad. In parallel, further efforts will be made to strengthen Norwegian´s position as a low-cost airline and to return the company to sustainable profitability. Geir is the ideal CEO to lead these efforts,” Øygard commented.
Scharm’s contract entitles him to nine months notice and he’ll remain at the airline to “support” the board on a full-time basis through to March 31, 2022. He will then be entitled to a 15 month severance payment paid in monthly installments.
The board said that it had attempted to reduce Scharm’s payout to a level that reflects “the challenges of the industry” but no agreement could be reached.
Late last year, around 1,100 pilots and cabin crew based at London Gatwick were laid off by Norwegian but were told the airline could not afford to pay their final salaries. Instead of being paid by the airline, Norwegian told redundant employees that they could keep their uniforms as a “keepsake”.
Some former employees were able to apply for hardship payments from a special government fund but applications took several months to process.
Norwegian has reduced it aircraft fleet from 156 aircraft to 51 aircraft, terminated out standing orders with Boeing and closed its long-haul business. As the airline emerges from the pandemic, it intends to focus solely on short-haul routes.
