Troubled low-cost carrier Norwegian has recently entered into an examinership and reconstruction processes as it attempts to secure its future. The airline’s financial struggles have brought about these legal matters. The ongoing coronavirus pandemic has further worsened these in recent months. As such, the carrier is having to pause the benefits of its rewards program.
A difficult few months for Norwegian
Over the last year, COVID-19 has significantly impacted virtually every facet of commercial aviation as we once knew it. Scandinavian low-cost carrier Norwegian has been far from immune to these difficulties, particularly in recent months. Indeed, in November, its capacity was down by a staggering 96% compared to the previous year. Its load factor for this period also fell by half.
As such, in order to secure its future, Norwegian submitted a rescue plan to its shareholders in December. This was approved with an 80% majority on the condition of significant restructuring. This process is taking place under Irish examinership.
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As part of its restructuring, the airline began 2021 by returning several aircraft to their lessors in Shannon, Ireland. It emerged that these were primarily Boeing 787 Dreamliners, which led to an announcement later in the month that it would be ceasing its long-haul flights.
Towards the end of the month, the airline received a lifeline in the form of government financial support. Nonetheless, Norwegian is still not out of the woods yet. Indeed, it announced last week that it would also need to halve the size of its remaining narrowbody fleet. As such, it will re-emerge as a very different airline to the red-nosed worldwide carrier we knew pre-pandemic.
Pausing the rewards scheme
Norwegian announced today that, while it undergoes its restructuring, it “will be pausing the Norwegian airline-related benefits of [its] loyalty program.” This is set to be a temporary measure, so reward memberships with the airline will remain active during the pause.
Members will also continue to be able to earn CashPoints, Norwegian’s digital currency, with the airline’s other reward partners. Each of these is equivalent in value to 1 Norwegian Krone (NOK), with every 10 being worth £1 ($1.37). However, the pause’s biggest impact is the fact that:
“…during this time, it will not be possible for [members] to earn or spend CashPoints or Rewards on Norwegian’s products or services (flight tickets, extra baggage etc.).“
With the pause only being a temporary measure, Norwegian has also considered its rewards scheme’s future. Specifically, it plans to “reserve a right to limit the spending of CashPoints as means of payment until the impact of the ongoing pandemic is under control.” This will be the case until “activities can return to a new normal,” although it has not specified the limit.
Despite imposing such limits, the airline has recognized that the ability to earn and spend points is currently minimal. As such, it will contact all members with points due to expire by the end of the year, to give them the opportunity to extend their validity for a further 12 months.
What do you make of Norwegian’s decision to pause its reward program benefits? Have you ever flown with the airline? Let us know your thoughts and experiences in the comments.