Norwegian’s new chief executive Jacob Schram has acknowledged that the Scandinavian budget carrier has yet to find a way of making its long-haul operation profitable.
Speaking at a financial results briefing earlier today, Schram states: “I don’t have the answer on what turns [low-cost] long-haul profitable.”
Schram joined Norwegian in January after the company’s long-standing former chief executive Bjorn Kjos stepped down in July 2019. The airline, meanwhile, embarked on a restructuring programme to secure profitability after years of rapid expansion took a toll on its finances.
“Nobody has proven that [low-cost long-haul] business model yet,” asserts Schramm. “But I definitely don’t want to throw it out.”
He describes Norwegian’s foray into long-haul flights as “interesting” and says that he sees “a lot of opportunities” to improve the operation in the short-term.
What can be done to secure profitability in the longer term, however, is “too early to say”.
Despite the uncertainty, he argues: “I really think we have a potential that we should try to go after, and then I have to come back later and say whether it is viable or not.”
As part of the ongoing restructuring effort, Norwegian has concentrated its European long-haul operation on Barcelona, London Gatwick, Oslo, Paris and Rome, and discontinued more than 20 intercontinental routes for the summer 2020 season.
Previous long-haul operations from Copenhagen and Stockholm have been discontinued under the effort.
Norwegian has also closed bases and routes to improve profitability on its European short-haul network.