Norwegian low-cost airline Norwegian is discontinuing long-haul routes from Stockholm to the US and Thailand. The closures are part of a move to become more profitable, the company said in a press release. Competitor SAS rose on the stock market after the announcement.
After an extensive review of its global long-haul operations, Norwegian has decided to discontinue flights from both Copenhagen and Stockholm to the US and Thailand from March 29 next year. However, Oslo will retain its US flights.
”"Scandinavia is not large enough to maintain intercontinental flights from Stockholm, Copenhagen and Oslo. We have also had challenges with the Rolls-Royce engines on our long-haul aircraft for some time, which means that we have to have more aircraft on the ground and which affects the route program," says Norwegian's Matthew Wood in a press release.
Norwegian has had major problems with compressors in its Rolls-Royce engines, which have shortened the life of the engines. However, earlier this month the airline announced that it had reached an agreement with the engine manufacturer regarding compensation. The engines have been on the Boeing 787 Dreamliner model.
Norwegian's shares are down 0.9 percent today. However, competitor SAS is rising after the announcement.
At 11 a.m., SAS shares were trading up 2.7 percent, compared with a 0.5 percent gain just before Norwegian issued the press release about the closure. This puts SAS shares at their highest levels since April of this year.
Despite the fact that the routes from Copenhagen and Stockholm are being closed, Norwegian writes that it is planning additional departures to the USA from other major European cities, such as London, Barcelona and Paris.
