Norwegian’s Argentinian subsidiary threatened?

 

Barely more than a year after its creation, rumors say the low-cost airline Norwegian Air Argentina could cease operations after the end of the winter season. Its parent company denied the claim.

After it was discovered that the low-cost carrier Norwegian Air Argentina (NAA) only displays flights until March 28, 2020 on its system, suspicions that the airline would cease activities after this date started to emerge. 

The rumors are not unfounded. Since its creation in October 2018, NAA has been under-delivering. It currently operates three Boeing 737-800s against the nine that were announced and failed to open more than eight routes, when it received the authorization to operate 152 of them by the Argentinian authorities.  Some suspect that NAA could be sold to a local competitor. “If our project in Argentina does not correspond to the plan, we are prepared to withdraw,” said Norwegian’s CFO Geir Kalsen in May 2019.

Meanwhile, the parent company Norwegian Air Shuttle is still working on its profitability, weighed down by a cumulative debt of $6.7 billion. On November 27, 2019, it announced that it would cease to operate half of its long-haul routes from Scandinavia towards Thailand and the United States, blaming a low demand and problems with its Dreamliners engines.

On November 29, 2019, NAA denied the rumors. “This is not the first time this has happened,” a company spokesman told Aviacionline, adding “at other times, we have also launched commercialization within a three- or four-month timeframe to adapt to seasonal changes in demand in Argentina and Europe, due to the inconvenience caused by the lack of single-aisle aircraft after the MAX delivery was disrupted.” 

Questioned on the prospect of a sale, the spokesperson admitted that “the goal of reaching the break-even for this year was not met, and we are not sure about when it could happen.”

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