Norwegian CEO steps down; Max grounding impacts financial results

Darren Wood
By Darren Wood July 11, 2019 09:09

Norwegian CEO steps down; Max grounding impacts financial results

Norwegian Air CEO Bjørn Kjos has stepped down from his position after 17 years at the helm.

The airline has appointed CFO Geir Karlsen as its a interim CEO, while chairman Niels Smedegaard will take on a more active role in the management.

Commenting on the changes, Smedegaard, said: “I am very pleased Bjørn will remain at the company as an advisor to the Board and the Chair. As Norwegian moves from growth to profitability, it will be an advantage for the company to benefit from Bjørn’s extensive network, in-depth knowledge of and experience with global aviation. We have already started the process of recruiting a permanent new CEO.”

During his tenure as CEO, Kjos developed the airline from a small domestic operation with 130 employees and four aircraft to a global airline with more than 11,000 employees and 162 aircraft.

The firm also posted its second-quarter 2019 financial results which showed the airline has been affected by the grounding of its 737 Max fleet.

Norwegian has 18 of the aircraft and revealed that it did not expect them to return to service until October, at least two months before its previous estimate of August.

In the financial report, Norwegian said the grounding could cost as much as NOK 700 million (£65 million) this year.

This figure is harming its return to profit, the airline said.

Elsewhere, the unit revenue (RASK) increased by 13%, and the revenue per passenger per kilometer (yield) increased by 11%.

For the second quarter, the total revenue was more than NOK 12 billion, an increase of 19% from the same period last year, primarily driven by intercontinental growth.

The load factor was 88%, up 1.2 percentage points from last year.

Darren Wood
By Darren Wood July 11, 2019 09:09