November 27, 2019 / 9:39 AM / 14 days ago

Norwegian Air to end routes from Sweden, Denmark to U.S., Thailand

OSLO (Reuters) - Budget airline Norwegian Air (NWC.OL) is ending flights from Copenhagen and Stockholm to the United States and Thailand due to weak demand and technical problems affecting the engines on its Boeing (BA.N) 787 Dreamliners, it said on Wednesday.

FILE PHOTO: A Norwegian Air plane is refuelled at Oslo Gardermoen airport, Norway November 7, 2019. REUTERS/Lefteris Karagiannopoulos

Flights between Oslo and the United States would continue, while routes between Norway and Thailand were under review, it said, the latest initiative to cut costs and restore profits after rapid expansion left the carrier weighed down by debt.

“Scandinavia isn’t big enough to maintain intercontinental flights from Oslo, Stockholm and Copenhagen,” Senior Vice President Commercial Matthew Wood said in a statement.

Norwegian’s shares were down 2.2% at 1310 GMT, although shares in Nordic rival SAS (SAS.ST), which has direct flights from Stockholm and Copenhagen to the United States, rose 2.7%.

Norwegian has shaken up the transatlantic travel market with low fares, challenging major transatlantic carriers such as British Airways (ICAG.L). But its profitability has suffered.

To stem losses, Norwegian has cut unprofitable routes, saying last month it would reduce capacity by 10% next year, the first plan to shrink in its near two-decade history.

Shareholders approved on Wednesday a share and bond issue, announced last month, to raise $273 million in cash.

Norwegian plans to use the extra cash to help cover costs of resulting from the grounding of its short-haul fleet of Boeing MAX aircraft and issues with engines on its long-haul Boeing 787 Dreamliners.

Britain’s Rolls-Royce (RR.L) said in September it would take longer than expected to fix problems with the Trent 1000 engine that were caused by poor durability of turbine blade components.

“We have for a time been struggling with the Rolls-Royce engines on our long-distance aircraft, which means we need to keep more planes on the ground. This affects our route schedule,” Norwegian’s Wood said.

The airline said it would increase the frequency of flights from European cities to U.S. destinations but did not give details.

Norwegian said on Nov. 12 it was launching non-stop flights from Chicago to Rome and Paris and from Denver to Rome. It now offers 50 routes between Europe and the United States.

Reporting by Victoria Klesty; Editing by Terje Solsvik and Jan Harvey

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