As Norwegian continues to downsize itself in order to stay in business, it has decided to give back all of its Boeing 787 Dreamliners and end all transatlantic service. The move will affect bout 2,700 U.S. employees and reductions will also happen in Europe, where the airline will refocus on its roots with just 70 narrow body aircraft. The move is good news for United Airlines mostly, though other carriers will also see benefit. Analyst believe Norwegian’s expansion into the United States drew passengers from United Airlines more than other carriers due to many of Norwegians routes being either direct competition or near direct competition.
Norwegian was plagued with problems, most were not its fault, except one, it grew too fast and lacked the capital, operating funds and reserves to hold it over in hard times. “Instead of banking its profits, the airline chose to buy or lease more aircraft too quickly and spend yet more money opening new destinations. Fast forward to 2020, all of the cumulative problems thrown at Norwegian, and it just didn’t put enough of its profits away for rainy days” says Paul Reinhardt, a U.K. based global aviation analyst and consultant to the United Nations international governing body for aviation, the International Civil Aviation Organization, ICAO, which is based on Montreal, Canada.
After acquiring brand new Boeing 787 Dreamliners, a wide body long-haul aircraft, Norwegian embarked on an aggressive expansion with long haul flights from Europe to the United States and to some south-east Asian destinations. It faced resistance in the United States from U.S. based airlines who advocated to the DOT to not allow Norwegian landing rights. It spent heavily to gain the right to fly to the U.S.
Next, the airline’s engine choice forced it to ground nearly all of its 787 fleet while other airlines continued to fly their 787’s with no problems. Norwegian chose Trent engines which proved to be very troublesome forcing a grounding of all 787’s that had these engines. U.S. airlines had choses the GE engine which did not have the same troublesome design as the Trent engines.
There were a couple other smaller issues that also were not the airlines fault, but nonetheless affected its ability to be profitable. Norwegian was also a 737 Max operator and a significant amount of its narrowly fleet were the new 737 Max’s. The 737 Max was grounded for two years following two airplane crashes, one in Indonesia and one in Ethiopia, both were caused by a new system called MCAS, and the resultant investigation discovered a nightmare web of cover-ups, and additional aircraft problems, with the type only recently beginning to be allowed to fly again.
This left Norwegian not being able to operate a significant part of its fleet, the 787 Dreamliners and the 737 Max’s. Enter stage left, the coronavirus Covid-19 at the start of 2020. This effectively killed off any possible chance the airline could fly enough to make any meaningful revenue to pay its bills on grounded aircraft and airport gate and ground fees at destinations across the United States, south-east Asia and in Europe.
“Without any operating capital or reserves, it was only a matter of time until the repo man came” added Reinhardt.