With almost every major airline trimming its summer flying schedule to prioritize high-traffic routes and maximize the use of jet fuel, the impact of oil prices sitting at $100 per barrel for weeks due to the war with Iran continues to have far-reaching effects.
While its financial problems stretch back years in what ultimately led to two Chapter 11 filings, the final blow to beleaguered Spirit Airlines was ultimately dealt by the price of jet fuel. The low-cost airline shut down operations and ran its last flight on May 1.
Other low-cost airlines such as Magnicharters in Mexico and BeOnd in The Maldives are so far avoiding a full collapse by what they hope will be a temporary and seasonal stop to flights.
Norse Atlantic Airways cuts 75 jobs, cancels routes
The first of what can easily turn into widespread airline staff furloughs are being reported this week with South Korean low-cost airline Jeju Air offering unpaid leave to an unspecified number of its employees.
While the airline has not confirmed the extent of and reason for the staff cuts, allowing staff to take unpaid leave while retaining their position for the future is almost certainly a way to cut costs at a time when multiple airlines are in a precarious position.
Related: Another low-cost airline furloughs staff over fuel costs
Launched out of Oslo as a low-cost airline flying transatlantic routes in 2021, Norse Atlantic has became the latest carrier to confirm that it is furloughing 75 administrative staff on top of job and pay cuts for non-flying crew.
The first of what risks being another round of cuts marks a 35% reduction in the airline’s administrative staff while the total number of crew cuts has not been confirmed.
The airline said that ongoing “geopolitical tension” is pushing it to take austerity measures that it hopes will lead to over $50 million in savings for the year while also canceling all of its flights into Los Angeles earlier this spring over what it said was the “unforeseen global fuel crisis” and “too-high fuel risk exposure” of running routes not brining in the required number of passengers.
Image source: Norse Atlantic Airways
“Announcing cost-cutting measures is a hard decision”: Norse Atlantic Airways
“Announcing cost-cutting measures, including redundancies to committed colleagues, is a hard decision to make,” Norse CEO Eivind Roald said in his latest statement on the staff cuts. “I want to sincerely thank all our Norse employees for their dedication, resilience, and the role they have played in building the company.”
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The austerity measures that Norse is billing “Project Falcon” also include closing down its base at Arendal Airport in southeastern Norway and moving its headquarters exclusively to Oslo.
Roald said that the cost-cutting measures will enable Norse to continuing running its flights to European capitals such as Oslo, London and Berlin from the East Coast of the U.S. although the fuel crisis poses severe problems for airlines around the world.
“We are truly sorry for the inconvenience, and apologize to passengers who have [had] their travel plans changed,” Norse said of the LAX route cut. “We will assist disrupted passengers as best we can.”
Related: Another airline shuts down over Iran war, all flights off
