Big Story 10

Norwegian Air to shut some bases and axe routes to cut costs

FILE PHOTO: A view of parked aircraft belonging to budget carrier Norwegian at Stockholm Arlanda Airport in this March 5, 2015. REUTERS/Johan Nilsson/TT News Agency

OSLO (Reuters) - Budget carrier Norwegian Air will axe a number of routes in Europe and to the U.S and the Middle East, shutting several bases as part of a cost-cutting plan announced last month.

The fast-growing carrier has been under pressure over the past 18 months to control costs and shore up its balance sheet as it looks to crack the transatlantic market by undercutting established rivals.

“The company has reached a point where it needs to make necessary adjustments to its route portfolio in order to improve the sustainability and financial performance in this very competitive environment,” Helga Bollmann Leknes, Norwegian Air’s Chief Commercial Officer, said in a statement to Reuters.

The airliner will close its bases in Palma de Mallorca, Gran Canaria, and Tenerife in Spain, as well as in Stewart and Providence in the United States. It would also shut the 737 base at Rome’s Fiumicino airport but keep its Dreamliner base there.

The company did not give a specific number of jobs that would be cut but said it would seek to minimise redundancies.

The flights affected are operated by Boeing 737-800 and 737 MAX 8 models. Flights operated by Boeing Dreamliner planes are not affected, Norwegian said.

“These aircraft are primarily used on European routes, but also some longer routes between Europe and the U.S. and Europe and the Middle East,” Norwegian Air said in the statement, adding that this would start in April and would continue “for the best part of 2019”.

The measures announced on Wednesday are part of a cost-saving programme of 2 billion crowns ($234 million) announced in December, Norwegian said.

Editing by Terje Solsvik; Editing by Elaine Hardcastle