Norwegian has reported a net loss of NOK 980 million for third quarter of 2020 results.
Demand remains depressed and Norwegian operated approximately 25 short haul aircraft during the third quarter out of a current total fleet of 140.
Norwegian carried approximately one million customers during the quarter, a decrease of 91% compared to the same period last year showing a slight improvement on the previous Q2 decrease of 9%. Production (ASK) was down 94% and passenger traffic (RPK) decreased by 96%. The load factor was 60.6%, a decrease of 30.6 percentage points compared to the third quarter of 2019.
Norwegian said that it has continued to “successfully convert debt and implement a series of cost-reduction measures throughout the third quarter”. Milestones during this quarter include the further conversion of lease liabilities and vendor debt to equity as well as the power-by-the-hour arrangements had a combined positive equity effect of NOK 2.9 billion in the quarter. Year to date, the restructuring improved equity by NOK 18.2 billion, said Norwegian
Jacob Schram, CEO of Norwegian, said: “Our third quarter results clearly show that the effects of the global COVID-19 pandemic continue to heavily impact our operations and financial position. Changing government travel advice and further restrictions as a result of a second wave of infections seen in many countries have further contributed to a decrease in customer confidence and certain routes becoming once again unviable leading us to rapidly adapt our network. We continue to work tirelessly to make sure that we can emerge from this crisis as a stronger company, well-positioned for future competition and thank our creditors, bondholders and shareholders who have shown us strong support throughout.”
Among other measures, the company has grounded most of its aircraft and temporarily laid off most of its staff. Norwegian says that it must consider further changes to production during the winter season and beyond based on travel advice and restrictions from governments in the company's markets and on customer demand.
“This crisis is far from over and as we enter the traditionally more difficult winter trading environment it is crucial that the Norwegian aviation industry receive further support if we are going to survive and get through this unprecedented situation and emerge ready to support the economic recovery of the Nordics from 2021 onwards,” said Schram.
However, the Norwegian Government has declined to further financial support for Norwegian. The airline has responded to this “challenging situation” by announcing the forced furlough of an additional 1,600 employees and a further reduction in capacity by parking 15 of the 21 aircraft currently in operation.
“Recently government-imposed travel restrictions have effectively stifled any hope of a stable and progressive recovery, Norwegian has been hit from all sides by factors outside of our control. This is a sad day for everyone at Norwegian and I sincerely apologise to all our colleagues that are now affected, but there is no other alternative. Prior to Covid-19, Norwegian employed more than 10,000 people, but the coming months there will be only 600 colleagues employed. Our goal is to keep six aircraft on domestic routes in Norway, and I expect that Norwegian will also receive route support from the Ministry of Transportation, as previously announced,” said Schram.