Norwegian Air slashed November traffic to stem losses

Norwegian’s breakneck expansion has brought mounting losses. (Reuters)
Updated 05 December 2019

Norwegian Air slashed November traffic to stem losses

OSLO: Norwegian Air cut its flight program last month, removing unprofitable routes in a bid to stem the budget carrier’s losses, its traffic report showed on Thursday.

Overall capacity, a measure of distance flown and the number of seats available (ASK), fell by 27 percent year on year, it said. Analysts in a Reuters poll had on average expected a 23 percent fall.

The move helped Norwegian fill remaining flights, raising the number of seats sold on each aircraft and boosting its yield — income per passenger carried and kilometer flown — by 12 percent to 0.37 Norwegian crown ($0.04), beating a 0.35 crown forecast.

Norwegian has shaken up the transatlantic travel market with low fares, but expansion also brought mounting debts. The company raised cash from its owners in November for a third time in 20 months. The airline on average filled 83 percent of seats in November, up from 78.8 percent last year.

“The planned capacity reduction has improved the figures ... we continue to deliver on our strategy of moving from growth to profitability,” Acting Chief Executive Geir Karlsen said.

Prior to October, when Norwegian’s capacity fell by 5 percent from the same month of 2018, the airline’s year-on-year ASK had risen every month since the firm went public in 2003.

The company has set a target of a 10 percent cut in ASK for 2020 compared to 2019, it said in October.

“We have adjusted our route portfolio and capacity for the coming winter season and summer seasons to ensure that we are well positioned to meet demand,” Karlsen said.

As temporary CEO since July, Karlsen has postponed debt payments, raised cash, brought in a Chinese leasing firm to take stakes in its fleet and partnered with US carrier JetBlue .

The company announced on Wednesday the sale of its domestic network in Argentina, launched 14 months ago, to JetSMART.

Karlsen, who is also chief financial officer, returns to being CFO and deputy CEO when industry outsider Jacob Schram takes over next year.


Dubai launches economic program for post COVID-19 recovery 

Updated 05 August 2020

Dubai launches economic program for post COVID-19 recovery 

  • “The Great Economic Reset Programme” is part of a “COVID Exit initiative” to help the recovery and reshaping of the economy
  • The economic program will feature analyses of current and future policies

DUBAI: Dubai launched an economic program as part of its efforts to reshape the emirate’s economy for a “sustainable” and “resilient” future post the coronavirus pandemic, the government said. 
The Dubai government partnered with the Mohammed bin Rashid School of Government (MBRSG) to launch “The Great Economic Reset Programme” as part of a “COVID Exit initiative” to help the recovery and reshaping of the economy, state news agency WAM reported on Tuesday. 
The economic program will feature analyses of current and future policies, research and extensive stakeholder consultation to set the direction and tone of future economic policies, regulations and initiatives.
The government plans to use local and international experts for economies and societies to create growth strategies for the Dubai economy.
The MBRSG held a “Virtual Policy Council,” with global experts and thought leaders to discuss the impacts of COVID-19 on the economy and potential policy responses and initiatives. 
Chief economists, senior practitioners and researchers from leading global institutions including the World Bank, joined experts from Dubai Economy and the MBRSG at the first roundtable.
“I believe the triple helix collaboration between public, private and academia stakeholders have always produced the best solutions in the past. In the highly uncertain environment now, extensive collaboration and cooperation between all stakeholders are vital to our future prosperity. The Virtual Policy Council will propose the best approaches Dubai and the UAE can adopt to address the risks and opportunities in the next normal economy,” said Mohammed Shael Al-Saadi, CEO of the Corporate Strategic Affairs sector in Dubai Economy.
“This Virtual Policy Council is a key component of the whole process where global experts and thinkers share their views on the future economy. In this new era, the role of governments in enabling the new economic actors is becoming increasingly central, and Dubai is well-positioned to lead the way with innovative models of growth post COVID19,” said Professor Raed Awamleh, Dean of MBRSG.
The roundtable also discussed the impact of the pandemic on international trade, foreign investment and tourism, as well as the rise of digital globalization.