Veteran Norwegian CEO steps down as airline focuses on profitability

Norwegian Air Shuttle chief executive and co-founder Bjorn Kjos has stepped down after 17 years at the helm but will remain with the company as an advisor to the chairman. Kjos’ tenure has seen the airline grow from a small domestic operation with 130 employees and four aircraft to a global low-cost carrier with 11,000 employees and 162 planes. Chief financial officer Geir Karlson will act as interim CEO and chairman Neils Smedegaard will take a more active role in management while a search is undertaken for a new chief executive. “I am confident that the board of directors will find the best-qualified successor to lead the next chapters of the Norwegian story together with the top management team,’’ Kjos, 72,  said in a statement. “Leaving the exciting future tasks to a new CEO and taking on a new challenge as an advisor, is a set-up I am very happy with. “I look forward to spending more time working on specific strategic projects that are crucial to the future success of Norwegian.” Smedegaard said he was pleased Kjos would stay at the company as an advisor and it would continue to benefit from his network, knowledge and experience. READ: Turbulence injures 35 on Air Canada flight. “Bjørn has played an unprecedented role in Norwegian’s success,’’ he said of the former fighter pilot. “His vision of offering affordable fares for all, combined with his enthusiasm and innovating spirit, has revolutionized the way people travel for pleasure and for business, not least between the continents.” Norwegian moved into the spotlight with its move in 2014 to launch low-cost flights across the Atlantic. But its determination to grow has seen it struggle financially and in 2018 the airline changed its emphasis from growth to profitability. It confirmed earlier this year it would close crew bases in Spain, Italy and US as part of a cost-reduction program announced in 2018. More recently, it has been hit by the Boeing 737 MAX groundings. It has 18 MAX aircraft and estimates the grounding will cost it as much as 700 Norwegian Kroner ($US82m) in 2019. It doesn't expect the fleet to return to service before October. In second-quarter results released Thursday, the airline reported a net profit 82.8 million Norwegian kroner ($U9.7 million), down 72 percent from the same period a year ago. However, the airline noted its underlying operating result before ownership costs was more than 2.3 billion kroner, the highest ever in a second quarter and 1.2 billion kroner higher than last year. Unit revenue (RASK) increased by 13 percent,  and yield was up by 11 percent. Total revenue was more than 12 billion kroner, an increase of 19 percent from the same period last year, primarily driven by intercontinental growth. Kjos said the results showed Norwegian was delivering on its strategy.