Norwegian Air is withdrawing from South American domestic flying by agreeing to sell-off its fledgling Argentinian subsidiary.
The disposal for an undisclosed sum to local carrier Jetsmart Airlines as part of a wider drive for profitability does not affect its Gatwick-Buenos Aires route operated by British arm Norwegian Air UK.
Norwegian Air Argentina started operating just over a year ago, having gained an air operator’s certificate in January 2018. It serves eight routes with 20 flights a day from the Argentine capital with three Boeing 737s which will return to service with Norwegian in Europe.
The sale came as Norwegian drafted in a former commercial chief from US low cost partner JetBlue Airways as interim chief commercial officer.
Marty St George replaces Helga Bollmann Leknes, who is leaving the airline after two years following changes in Norwegian’s top management team.
St George has more than 30 years of aviation industry experience including positions at United Airlines and US Airways, including responsibilities for revenue-generating activities, network management and innovation.
Explaining the sale of the Argentinian subsidiary, Norwegian acting CEO 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.
“We believe that the agreement we have signed 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% of the domestic market and will become the third-largest operator in the country.”
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Meanwhile, Norwegian increased unit revenue for the eighth consecutive month in November with a rise of 18% over the same period last year.
This came as capacity was cut and the load factor rose by 4.2 percentage points to 83% as almost 2.3 million passengers were carried.
Karlsen said: “We are pleased that our unit revenue continued to increase in November. Our load factor is higher and the on-time performance has improved.
“In line with our strategy of moving from growth to profitability, the planned capacity reduction has improved the figures.
“We have adjusted our route portfolio and capacity for the coming winter season and summer seasons to ensure that we are well positioned to meet the actual demand.
“The figures show that we continue to deliver on our strategy of moving from growth to profitability.”
The carrier continued to reduce its CO2 emissions in November with 73 grams per passenger kilometre, a reduction of 6% year-on-year despite grounding of the Boeing 737 Max which has forced the Norwegian to wet lease older aircraft.