European airline, Norwegian Air has announced plans to lay off about 4,700 of its employees as it struggles with the negative impacts of COVID-19 that has seen all its international flights suspended.
The ‘temporary’ layoffs makes up about 90 per cent of its workforce and includes pilots, cabin crew, maintenance and administrative staff.
According to Norwegian Air CEO, Jacob Schram, the company has also declared its Swedish and Danish subsidiaries bankrupt.
“The impact the Coronavirus has had on the airline industry is unprecedented. We have done everything we can to avoid making this last-resort decision, including asking for access to government support in both Sweden and Denmark,” he said.
The lay-offs will however, not affect about 700 pilots and 1,300 cabin crew based in Norway, France, and Italy. This is because in Norway, the government pays for all salary-related costs throughout the duration of the furlough period, a providence that is unavailable in Sweden and Denmark.
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US President Donald Trump extended his restrictions on travel from Europe in the beginning of March to include Britain, Norwegian’s biggest destination for transatlantic flights, while other nations also severely limited air traffic. All flights to the United States are now suspended.
Norwegian Air is a low-cost airline and Norway’s largest airline. It is the third largest low-cost carrier in Europe behind EasyJet and Ryanair, and the ninth-largest low-cost airline in the world. Having lost money each year from 2017 to 2019 and raised cash from shareholders on three occasions, the company’s debts and liabilities had grown to 82 billion Norwegian crowns ($7.9 billion) by the end of last year.
The airline joins several other airlines that have been adversely affected by the covid-19 crisis due to travel bans, forcing them to fire their employees. South African Airways recently announced the layoff of all its employees while Africa’s biggest air passenger carrier, Ethiopian Airlines, also announced that it is firing most of its staff and sending some on mandatory leave.