The rumors about Norwegian selling off its Argentina operation have been circulating for a while now. Today the rumors became an official reality as Norwegian Air announced that Norwegian’s operations in Argentina (NAA) are being discontinued and acquired by JetSMART Airlines.
Who is JetSMART Airlines, buying NAA?
Norwegian Air Argentina (NAA) is selling 100% of its subsidiary to JetSMART Airlines, an Argentinian ultra-low-cost domestic carrier. JetSMART is assuming the NAA operation with immediate effect.
JetSMART video presentation
Norwegian and JetSmart anticipate the sale will cause a minimum impact on passengers. JetSMART will simply continue to operate Norwegian’s scheduled flights from the Buenos Aires Aeroparque Airport.
Integration should take several months. The Norwegian brand will be gradually phased out of the domestic airline market in Argentina.
What happens to Norwegian’s 737s based in Argentina?
Norwegian’s three Boeing 737s used by NAA will be flown back for European service. JetSMART will utilize its Airbus A320 airplanes for the NAA operation.
Why did Norwegian sell its Argentina subsidiary?
Norwegian’s acting CEO and CFO (until Jacob Schram becomes the new CEO on January 1st) Geir Karlsen was quick to add,
“We’re taking necessary steps to return to profitability.”
That one sentence basically explains it all. The sell-off is only one step in the right direction to place Norwegian on a steady course financially, with an aggressive operations plan currently in effect.
Geir Karlsen also pointed out that decisions, such as the Argentina sell-off were necessary to allow the airline to progress from growth to profitability.
He pointed out that Norwegian had made important changes to its overall route network to ensure long-term profitability.
Location-specific reasons for discontinuing Norwegian Air Argentina
Geir Carlsen said,
“Attaining satisfactory profitability for a relatively small domestic operation (Editor’s note: Argentina) has proved difficult to achieve, given the overall situation in the country. While most of NAA’s costs are denominated in dollars, revenue is obtained in pesos only, and the sharp depreciation of the peso against the dollar has created a significant gap between costs and revenue.”
Norwegian Air route between London and Buenos Aires
Norwegian’s route between London and Buenos Aires will continue, unaffected by the NAA subsidiary selloff.
JetSMART’s comments about the purchase of the Norwegian Air Argentina subsidiary
Estuardo Ortiz is the CEO of JetSMART. He commented,
“We are very excited about the opportunity to combine Norwegian Argentina with our current JetSMART operations. 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.”
Rumors of NAA sale started in March
Oh, the rumors of the selloff that have circulated in the airline industry for a long time first started when people noticed that Norwegian Air Argentina only displayed flights until March 28, 2020, in the reservations system.
Captain Jetson Airline & Travel news first reached out to Norwegian when today’s news was just a rumor. Norwegian said that the airline does not respond to rumors, which, of course, is understandable.
So, what do you think about the Norwegian Argentina subsidiary being sold to JetSMART? You can send us your comments here.
Featured Image: JetSMART Airlines