Following several years of double-digit increases in capacity, including an unprecedented 37 percent hike in output measured in available seat kilometers in 2018, Norwegian Air Shuttle is moving ahead with plans to slow growth and trim costs to strengthen its financial performance.
“We have adjusted and optimized our route portfolio and the capacity going forward. We have also made seasonal adjustments for the winter,” Norwegian CEO Bjørn Kjos said on Monday, confirming the company “will now enter a period of slower growth.” Europe’s third largest low-cost carrier in passenger numbers took delivery of 25 new Boeing 737s and 787s and launched 35 new routes primarily between Europe and the U.S. It also added South America to its network with the launch of a direct route between London Gatwick airport and Buenos Aires, as well as new domestic routes in Argentina. Network-wide passengers rose 13 percent year-on-year, to 37.4 million, though load factors slipped 1.7 percentage points to 85.8 percent.
The rapid global expansion, however, also led to a weakening of its financial footing, prompting the company to initiate the sale of its leasing arm to reduce debt. Last month, Norwegian also started implementing a cost savings program, #Focus2019, which Kjos said “will have an immediate and continued positive influence throughout the year.” #Focus2019 targets savings of at least 2 billion Norwegian kroner ($234 million) this year.
Norwegian did not give an update Monday on the state of play of the proposed sale of all or part of its aircraft leasing portfolio, but just before Christmas it said that talks about forming a joint venture for aircraft ownership continue with “full force.” The process of divesting aircraft also continues, it added, noting that it is seeing “significant interest” in its existing fleet and future deliveries.