Norwegian Air Planning To Ditch Its Irish Air Operator Certificate; Appoints New CEO
Norwegian Air is planning to ditch its Irish air operator certificate, and has appointed a new CEO.
It was reported last week that Norwegian Air had warned its Dublin staff that it may have to cut jobs, and, according to The Irish Independent, the airline has now told its employees in Ireland that it is reducing the number of air operator certificates (AOC) that it holds from five to two.
One of the air operator certificates that Norwegian Air is retaining is based in Norway and the other is based in Sweden, so the airline can continue to have an air operator certificate in the EU.
It is understood by The Irish Independent that Norwegian Air employees in Ireland were told that the Irish AOC that Norwegian Air International (NAI) holds will be terminated in the longer-term.
Formal consultations with employee representatives in Dublin will reportedly start soon, and it is understood that employees will seek voluntary redundancy terms on par with those offered at Aer Lingus and Dublin and Cork airport operator DAA.
During Norwegian Air's recent examinership process, the Irish High Court was reportedly told that the survival of Norwegian group companies including NAI is "central to the survival of the group as a whole".
Norwegian Air has reportedly already begun moving NAI aircraft off of the Irish aircraft register, and employees in Ireland are concerned that NAI will now effectively be put into hibernation as its importance to the group lessens.
However, a Norwegian Air spokesperson reportedly said that the airline will not close NAI.
The Irish Independent quotes the spokesperson as saying, "NAI is a strategically and commercially important part of the wider Norwegian group due to specific intra-European routes and ticket sales that are intrinsically linked to NAI."
However, sources have reportedly said that NAI is only important from the point of view of ticket sales because Norwegian's new Swedish AOC has not yet secured so-called ticket-stock approval, which is expected in September, when sources say NAI's role will diminish considerably.
Norwegian Air has reportedly informed its employees in Ireland that some future positions may be available to support the two AOCs that the airline will maintain in Norway and Sweden, and that the majority of those positions would likely be based in Oslo, Barcelona and Riga.
In a recent presentation to employees that was seen by The Irish Independent, Norwegian Air reportedly said that its new simplified organisational design will "drive high productivity" and that it will have business centres outside of the Nordic region to "lower cost and allow for efficient scaling".
In other Norwegian Air news, the airline has announced that Geir Karlsen has been appointed as the new CEO of Norwegian Air Shuttle ASA, replacing former CEO Jacob Schram.
In a statement published on Norwegian Air's website, Norwegian board of directors chairperson Svein Harald Øygard said, "I am pleased to announce that Geir Karlsen on request of the board has accepted the job as CEO of Norwegian. Karlsen has successfully led the financial reconstruction of Norwegian and has the competencies, focus, trust and dedication that makes him the best choice as CEO of Norwegian.
"As travel bans now are about to be lifted, Norwegian stands ready to offer thousands of flights to our customers in the Nordics and abroad. In parallel, further efforts will be made to strengthen Norwegian's position as a low-cost airline and to return the company to sustainable profitability. Geir is the ideal CEO to lead these efforts."
Norwegian Air stated on its website, "Karlsen (born 1965) has held the position of chief financial officer (CFO) since April 2018. From July 2019 to December 2019, he was acting chief executive officer (CEO) of Norwegian. He has extensive experience from listed companies within shipping and offshore. Mr. Karlsen has over the last 12 years held various CFO positions at international companies such as Golden Ocean Group and Songa Offshore. Before Norwegian, he held the position group CFO at London-based Navig8 Group, the world's largest independent pool and management company. Geir Karlsen has a degree in Business Administration from BI Norwegian Business School."
In a statement also published on Norwegian Air's website, Karlsen said, "I appreciate the trust given by the board of directors, and I am pleased to accept the opportunity of serving Norwegian in a new role as CEO. Going forward, our main priorities will be to increase the profitability of our low-cost operations and to attract new and existing customers in all key markets. Norwegian is well positioned following the recent reconstruction of the company, with a strong brand, proven products and services, and not least a team of highly experienced colleagues ready to fight for every customer."
Norwegian added on its website, "The search for a new CFO will commence immediately.
"The board of Norwegian voted on June 20th to end the CEO tenure of Jacob Schram. Mr. Schram's employment contract, signed in 2019, entitles him to nine months' notice. He will support the board on full-time basis during his notice period up to March 31th, 2022. He will receive his current salary until then, and thereafter a 15 month severance payment in monthly installments, as specified in his employment contract of November 20th 2019. An effort has been made by the board to bring the severance payments to a level reflecting the challenges of the industry, but no agreement could be reached.
"Geir Karlsen will receive a salary of NOK 4.5 million, a bonus contingent on the delivery of the 2021-2022 Business Plan and share options to be awarded based on the share price at the end of day, June 21st 2021."
© 2021 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.