Jacob Schram, chief executive of embattled low-cost carrier Norwegian says the airline plans temporary layoffs that will affect “a significant share” of its workforce. The news emerged as Norwegian announced plans to axe around 3,000 flights between mid-March and mid-June in response to a slump in bookings because of the COVID-19 crisis.
Earlier, Norwegian said it had shuttered its bases in Italy because of a national lock-down and calls from the Italian government to avoid all but essential travel.
“This is a critical time for the aviation industry, including us at Norwegian,” Schram commented. He called on government’s to “immediately implement measures to imminently reduce the financial burden on the airlines in order to protect crucial infrastructure and jobs.”
Schram did not detail what measures should be implemented but there have been high-level requests to ease the so-called ’80-20′ rule in which airlines have to use their assigned slots 80 per cent of the time of risk losing them. The rule has led to airlines operating empty ‘ghost flights’.
“Unfortunately, cancellations will affect a significant share of our colleagues at Norwegian,” Schram warned. “We have initiated formal consultations with our unions regarding temporary layoffs for flying crew members as well as employees on the ground and in the offices.”
He called for “constructive dialogue” to get through this “difficult situation together’.
The announced cancellations amount to an approximately 15 per cent cut in overall capacity. That’s still significantly less than the likes of Lufthansa which has warned it could slash capacity by as much as 50 per cent in the coming weeks and months.
Last week, Norwegian said it was partially insulated from the downturn because it relied more on leisure travellers who were still booking flights. Other airlines have been affected by corporate customers banning their employees taking international travel.
Some analysts have suggested Norwegian will need a further cash injection to remain in business. Shares in the airline have cost nearly 50 per cent of their value in the last week alone.
