Jacob Schram made the stark warning as politicians in Oslo rejected calls for further funding.
A slap in the face. That’s how Norwegian CEO Jacob Schram has described the announcement by the government of Norway that his airline will not receive any further financial support. The carrier has said it “clearly communicated” that additional funds were needed to continue its flying programme during the pandemic, however this appears to have had little traction among politicians in Oslo.
In a statement released on November 9, Schram said the company is “facing a very uncertain future”, adding that “we will do everything in our power to get through this crisis”. The CEO hit back at what he sees as the unfair advantages offered to rivals, alleging that “competitors are receiving billions in funding from their respective governments”.
He also warned that if Norwegian’s operations were to shrink further – or even disappear completely – there would be major implications for domestic air traffic: “We offer routes from Kristiansand in the south to Svalbard in the north, routes that cannot be replaced overnight. It will take time and it will have consequences for the competitive situation in Norway like we have seen before.”
Schram also emphasised the importance of the airline in bringing international business and leisure visitors to the country: “Based on the number of tourists we fly to Norway, we contribute to sustaining 24,000 people in our country and boost the local economy by approximately 18 billion NOK [£1.52bn] per year. That alone clearly demonstrates that even moderate financial support would constitute a profitable investment for Norway. How anyone could come to a different conclusion is impossible to understand.”
While no passenger airline has had a positive 2020, COVID-19 has been particularly brutal to Norwegian. Its exposure to the transatlantic market, coupled with a collapse in leisure travel and mounting debts have led to doubts about its longer-term strategy. At the beginning of the year, Norwegian anticipated the “best summer ever” for the company – a prediction that seems all the more distant given these latest developments.
“We could clearly see the results of our hard work to go from growth to profitability, which was initiated in 2018. With further support to get Norwegian through this unprecedented crisis for the aviation industry, we would come out as a more sustainable and competitive airline, with a new structure and improved operation. Without support, the way forward has become much more uncertain,” concluded Schram.
At the time of writing, Norwegian has 2,300 employees in Norway and several thousand others based overseas.
