The hunt for profitability continues, the time with Norwegian Air Shuttle choosing to dispose of its Argentinian – Norwegian Air Argentina – with immediate effect.
Norwegian Air Argentina will become part of JetSMART (owned by Indigo Partners, owners of Frontier Airlines, Volaris and WizzAir).
For passengers – flights continue as planned. Flights will continue to from Aeroparque Airport, using Norwegian Boeing 737 aircraft for now. These three aircraft will be released over the next six months by JetSmart – as they covert the operation to an Airbus A320 family operation.
The three aircraft will then return from Argentina back to Europe, where they will be redeployed into the main Norwegian Air Shuttle fleet.
Fiscal terms of the translation have not been disclosed.
Acting CEO and CFO of Norwegian, Geir Karlsen said
“As Norwegian moves from growth to profitability, we are taking all the necessary actions required to ensure that Norwegian is well positioned going forward. Over the past few months we have made important changes to our route network to ensure long-term profitability. Attaining satisfactory profitability for a relatively small domestic operation has proved difficult to achieve, given the overall situation in the country. While most of NAA’s costs are denominated in dollars, revenue is obtained in pesos only, and the sharp depreciation of the peso against the dollar has created a significant gap between costs and revenue,”
Meanwhile, Estuardo Ortiz, CEO of JetSMART is happy, stating
“We believe that the agreement we have signed today with JetSMART secures a significant part of what we have built over these two years; continuity of the network and opportunities. It brings the two newest airlines in Argentina into a stronger combined entity that currently carries about 10 percent of the domestic market and will become the third-largest operator in the country”.
“We are very excited about the opportunity to combine Norwegian Argentina with our current JetSMART operations. JetSMART has a long-term commitment to Argentina as well as of our vision of becoming the leading ultra low-cost airline in South America. With this transaction we will continue providing affordable air travel to our customers both from Aeroparque and El Palomar airports,”
CEO of Norwegian Air Argentina, Ole Christian Melhus added
“All our colleagues in Argentina deserve a word of recognition for their dedication and hard work. The past two years have proven eventful – not only have they built a fully-fledged airline from scratch, but they have also operated it to the highest professional standards. In doing so, they have earned for Norwegian the gratitude and respect of the Argentinian people,”
Business as usual
With Norwegian Air Argentina now someone else’s problem (and running as normal), we turn other matters. The London Gatwick to Buenos Aires service operated by Norweigan Air UK will continue to fly as per normal. All staff will transfer to JetSMART, except the call centre staff who will be retained by the airline.
Or not as usual…
With the end of the Argentinian adventure, it seems that Marty St. George will take the reigns of Norwegian Air as Interim Chief Commercial Officer. Coming fresh from JetBlue and previously of United Airlines and US Airways, expect the cutting to get a lot more interesting as Norwegian Air Shuttle attempts to find profitability.
Whilst Norwegian Air Shuttle’s Argentinean affair could at best be described as “ill-thought-out” and at worst “a waste of time”, exiting at this point cuts their costs down and prevents further money going into the project – where the race for profitability continues with the airline.
But we have a path how it intends to get there. Cuts.
And lots of them.
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