Norwegian has sold its Argentinian subsidiary to Chilean low-cost carrier JetSmart for an undisclosed amount, as the Scandinavian group looks to cut costs and focus on core operations. "As Norwegian moves from growth to profitability, we are taking all the necessary actions required to ensure that Norwegian is well-positioned going forward," states acting chief executive and finance chief Geir Karlsen. Control of Norwegian Air Argentina's operations have been transferred with immediate effect. Norwegian's three Boeing 737s are not included in the deal. They will return to Europe over the next six months and be replaced with JetSmart Airbus A320s. "Over the past few months we have made important changes to our route network to ensure long-term profitability," states Karlsen. "Attaining satisfactory profitability for a relatively small domestic operation has proved difficult to achieve, given the overall situation in the country." Profitability was also hampered by rapid devaluation of the Argentinian peso, creating a significant gap between the subsidiary's earnings and its dollar-denominated costs. JetSmart will continue to operate Norwegian Air Argentina's scheduled flights from Buenos Aires Aeroparque airport. However, the unit's branding is to be phased out over the coming months. The enlarged JetSmart group will control around 10% of the domestic market and will be the third-largest operator in the country. "We are very excited about the opportunity to combine Norwegian Argentina with our current JetSmart operations," states chief executive Estuardo Ortiz. "JetSmart has a long-term commitment to Argentina as well as of our vision of becoming the leading ultra-low-cost airline in South America. With this transaction we will continue providing affordable air travel to our customers both from Aeroparque and El Palomar airports." All of Norwegian Air Argentina's flights are domestic, and the sale will not impact Norwegian's long-haul flights from London to Buenos Aires, which are operated by Norwegian Air UK. Norwegian Air Argentina began operations in October 2018 with a fleet of three Boeing 737-800s. It operated 20 daily flights across eight routes between Aeroparque airport and Bariloche, Cordoba, Iguazu, Jujuy, Mendoza, Neuquen, Salta and Ushuaia. Separately, Norwegian has disclosed the appointment of Marty St George as interim chief commercial officer. St George has more than 30 years' industry experience. Until recently, he served as commercial chief at JetBlue Airways, having previously held positions at United Airlines and US Airways. Helga Bollmann Leknes, who had been serving as commercial chief, "has decided to leave the company after two years, following changes in Norwegian's top management team", says the airline.

Source: FlightGlobal

Two days after it was handed an ultimatum by Hong Kong authorities, Hong Kong Airlines (HKA) received temporary reprieve — in the form of a cash injection plan. The embattled carrier, facing the possibility of being wound up, says in a statement that the plan was drawn up "following urgent consultations". It did not specify how much cash will be injected, or where the funds will come from. The sudden injection of funds comes as Hong Kong's Air Transport Licensing Authority (ATLA) laid down two new licensing requirements for the airline. The carrier must, by a certain deadline, ensure that cash is injected, and also be able to raise and maintain its cash and cash equivalents. ATLA, which has the power to revoke a carrier's operating licence, said on 2 December that it will stipulate what the limit will be, but did not provide any details. With plans put in place to inject fresh funds, HKA says it will now pay outstanding salary to its staff by 5 December. “Our services will gradually resume to normal as soon as the funds arrive,” it adds. HKA has been the subject of close regulatory scrutiny recently, as a result of its dire financial situation. Just a week earlier, ATLA noted that HKA’s financial position has "deteriorated rapidly", such that it was hampered in its ability to fulfil its obligations as an employer to pay the salaries. The carrier undertook multiple rounds of capacity cuts in recent weeks — in early November, it said it was slashing capacity by 6% as its financial problems mounted. HKA suspended Los Angeles then, and adjusted frequencies to nine other points in its network, including Osaka, Okinawa, Tokyo and Bangkok. HKA later withdrew completely from the North American market, axing Vancouver from its network. The airline also suspended Tianjin and Ho Chi Minh City, and said it will be focusing on "priority routes".

Source: FlightGlobal

Italy's government has approved a €400 million ($443 million) loan to troubled flag-carrier Alitalia, to provide funding while a strategy for the airline's future is decided. The Italian council of ministers met on 2 November to discuss "urgent measures" to ensure the continuity of Alitalia and Cityliner services. It states that the loan is intended to allow for the completion of a corporate transfer by 31 May 2020. The loan will fund "non-deferrable management needs" for the airline and the execution – by Alitalia's commissioners – of strategic initiatives to make the company's structure more efficient, it adds. Government steps to preserve Alitalia's operations follow the failure to secure a buyer for the airline. Both Alitalia and regional division Cityliner remain in extraordinary administration. Rail firm FS Italiane had been attempting to secure agreement from potential consortium partners – including major airlines – to acquire SkyTeam alliance member Alitalia, but during November it stated that the conditions to formalise a bid had not been reached. Alitalia's unions have been pressing the government for a long-term solution, perhaps involving nationalisation of the carrier.

Source: FlightGlobal