Cost-cutting at Norwegian kicked in to high gear this month. The carrier is trimming expenses in several areas as it seeks to shore up its books. The cuts affect passengers and crew alike, demonstrating just how critical and broad the efforts are.
The carrier hopes that the moves will improve profitability and reduce the cost impact of seasonal demand shifts. Previously Norwegian added service between the Caribbean and North America to help offset some of the seasonal slack.
Premium Passenger Perks Pared
Travelers flying in Norwegian’s Premium cabin will see a few perks trimmed from their travel experience as a result of the cuts. Lounge access was reported removed early in the month.
On-board booze cuts came shortly thereafter.
Neither of these cuts will deliver massive savings for the company, but they likely represent $30-50 per passenger in hard costs so over the larger operation the numbers will add up.
Crew Bases Shuttered
Several of the carrier’s crew bases are also being closed, including three US locations.
Citing internal documents Aeronews.RO is reporting closure of the carrier’s 737 bases at:
- Palma de Mallorca (PMI)
- Gran Canaria (LPA)
- Tenerife (TCI)
- Rome (FCO)
- Stewart (SWF)
- Providence (PVD)
Additionally, 787 pilot bases will be closed at:
- Amsterdam (AMS)
- Bangkok (BKK)
- Fort Lauderdale (FLL)
Affected 737 crew will be given the opportunity to transfer to bases at Oslo, Stockholm or Madrid. The 737 crew will also have the option to switch to the 787 fleet and long-haul operations.
Cutting the US-based employees will almost certainly draw the ire of other US airlines that fought against Norwegian’s license to fly Transatlantic with the portion of its fleet based in Ireland. One of the many arguments Norwegian made to counter those objections was that it would become a significant employer in the US market. That is no longer the case. Permission was ultimately granted in December 2016 and flights commenced in June 2017.
With all these cuts it is almost hard to believe that some good news is available. For passengers hoping to get online while flying Norwegian long-haul, however, the news is great. Norwegian and Collins Aerospace announced last week that the first 787 with inflight connectivity is now online. At least fourteen more in the fleet are expected to be fitted by the end of 2019. New 737 MAX deliveries will also carry the connectivity system on board. Inmarsat is the supplier of the satellite network for Norwegian’s 787 and 737 MAX fleet.
The on-board hardware is not cheap. Moreover, Norwegian plans to continue delivering its complimentary basic web browsing offering on board, adding expense for the service. Bringing these costs into the operation as the carrier slashes expenses elsewhere is an interesting decision, to be sure. It is almost certainly better for passengers on board: far more of Norwegian’s customers will benefit from the free wifi than the free booze for premium passengers. But the savings from one almost certainly do not offset the costs of the other.
Norwegian declined to comment on the finances around adding the wifi kit to its fleet.