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.


Tunisia’s tourism industry hit hard by coronavirus pandemic

Updated 27 September 2020

Tunisia’s tourism industry hit hard by coronavirus pandemic

  • Tourism accounts for about eight percent of Tunisia’s national output

DUBAI: Tunisia’s tourism industry has been hit hard by the coronavirus pandemic, and is expected to decline further before 2020 ends.

Tourist activity has shrunk by 60 percent, the country’s tourism minister Habib Ammar said, and that figure could reach 70 percent to reflect the World Tourism Organization’s estimate for global tourism.

Tourism accounts for about eight percent of Tunisia’s national output and is the country’s second biggest employer, with around 400,000 people involved in the industry, after the agricultural sector.

The number of tourists rose 13.6 percent to 9.5 million in 2019, a record level, but Tunisia’s 10-million-visitor target for this year was sidelined when the coronavirus pandemic hit.

Despite this quandary, the government is considering various proposals to help stakeholders in the sector, state news agency TAP reported.

A gradual recovery of tourism activity will be recorded next year, both worldwide and nationwide, ensuring that the tourist units that will be preserved will have the capacity to accommodate tourists, it added.

Ammar also said that government remains committed to implement support plans such as the rescheduling of the settlement of bank and social security fund debts, and extending credits over longer repayment periods.

The tourism ministry is working with all intervening parties to implement this measure, which will make it possible to provide liquidity to the tourist units, and consequently, to guarantee a better future for the tourist activity, he added.

“This will also allow the ministry to develop a strategy and a clear plan for the sector in the medium and long term.”