Dive Brief:

• On Monday, Oslo-based discount airliner Norwegian Air Shuttle announced the board had fired CEO Jacob Schram after 18 months, replacing him with CFO Geir Karlsen.

• Karlsen, who has been CFO for just over three years, has led Norwegian through several capital raises, and served as acting CEO for five months in 2019 following the departure of founder Bjorn Kjos.

• “Our main priorities will be to increase the profitability of our low-cost operations and to attract new and existing customers in all key markets,” Karlsen said in a statement. “Norwegian is well positioned following [its] recent reconstruction.”

Dive Insight:

The news comes one month after Norwegian exited bankruptcy protection with over $700 million in capital, obtained through bond issuances and share sales. The airline was already struggling before the pandemic, competing in the low-cost market with Ryanair, and in the transatlantic market with British Airways.

Since January, Norwegian has been reverting to an operating model centered on short-haul flights within Europe. It also has cut down its fleet from 150 to 40 planes, but it plans to increase that number to 70 in 2022.

With Karlsen’s leadership, Norwegian gained court approval for the overhaul in March, Bloomberg reported, a decision that led it to restructure its balance sheet and bring in new investors.

“It'll be very exciting to see whether we can make this company profitable,” Karlsen told Reuters. “We have a unique opportunity now with Norwegian to create the company I have wanted for a long time.”

“Karlsen has successfully led the financial reconstruction of Norwegian and has the competencies, focus, trust and dedication that makes him the best choice as CEO of Norwegian," Svein Harald Øygard, Norwegian's board chairman, said.

As travel bans ease and vaccination numbers tick upwards across Europe, “further efforts will be made to strengthen Norwegian’s position as a low-cost airline and to return the company to sustainable profitability,” Øygard said. “Geir is the ideal CEO to lead these efforts.”

“The board’s decision to fire me came as a big surprise,” Schram told Reuters, adding he was willing to negotiate on his severance payment but was unable to come to an agreement with the board.

The search for a new CFO has commenced immediately, Norwegian said.