Norwegian cuts two transatlantic routes, trims 10 to seasonal


LCC Norwegian will discontinue two transatlantic routes, switch 10 from a year-round to a seasonal basis and move others from Oakland International Airport to San Francisco International as it tries to shore up its balance sheet.

The moves, announced July 8, came the same day as financial analysts said it is becoming increasingly likely the airline will have to raise more equity within the next year.

Two routes—Las Vegas-London Gatwick and Orlando-Stockholm—are being “discontinued indefinitely,” the airline said.

Ten current year-round routes will become summer-only, reflecting lower winter demand, with the aircraft redeployed to more profitable long-haul routes elsewhere in the company’s network. The routes will not operate over winter 2019-2020 but “might return” for winter 2020-2021, the airline said.

The affected routes are: Boston-Paris Charles de Gaulle, Chicago-Gatwick, Denver-Gatwick, Fort Lauderdale-Copenhagen, Los Angeles-Copenhagen, LAX-Oslo, LAX-Rome Fiumicino, New York JFK-Copenhagen, New York JFK-Stockholm and Orlando-Oslo.

Two routes currently served from Oakland—to Barcelona El Prat and Paris—will switch to San Francisco from the start of the winter season. This follows a similar transfer of the London Gatwick service from Oakland to San Francisco earlier this year.

Norwegian’s summer seasonal services to Copenhagen, Oslo, Rome and Stockholm will remain at Oakland.

“We see slightly different booking patterns for routes to London, Paris and Barcelona versus, in this case, Scandinavia and Rome, out of the Bay Area,” Norwegian director of communications-North America Anders Lindström told ATW.

“We have been very pleased with Oakland International Airport and their tremendous help to put Norwegian on the map, both in the Bay Area and in Europe, as a seamless gateway to Northern California. However, with San Francisco International Airport, we do have four advantages: improved search engine optimization, higher yields, more premium travelers and better cargo opportunities,” Lindström said. “We are very pleased with how SFO-London has been performing in a relatively short period, and we are expecting similar results for Barcelona and Paris once we move those routes to SFO at the end of October. Oakland, however, is better suited for more inbound traffic and seasonal routes.”

“After a thorough review of our long-haul network and given that some US markets are highly seasonal, it is a natural step to focus our operations this winter on counter-seasonal routes that are more profitable, such as Asia, and [we are] also looking into growing our South America network,” Norwegian SVP-commercial, long-haul and new markets Matthew Robert Wood added.

Meanwhile, Bernstein Research analyst Daniel Roeska said Norwegian is “running out of runway” in its attempts to avoid having to raise more funding.

In a report, he said the airline is grappling with the general overcapacity in Europe as well as continued losses caused by the grounding of its 18 Boeing 737 MAX 8s. The carrier is using less-efficient and leased-in replacements for the MAXs, eroding earnings “and most importantly, equity,” Roeska wrote.

“The only relevant question for [Norwegian] at this point in time is whether the company can remain a going concern without a further equity raise. In our view, this is unlikely,” he said.

While the company “is doing the right things in cutting unprofitable routes,” trying to reduce CASK ex-fuel and deferring capital expenditures to preserve liquidity, “we doubt that it has enough time or headroom to do this fast enough,” he said.

Alan Dron, [email protected]



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