This week, Norwegian has received miserable financial news. The company has laid off 1,600 employees and reported record losses. It began with the government on Monday saying no to further support that the company had requested.
On Tuesday, the financial figures for the third quarter came out, which did not unexpectedly offer more bad news:
“Changed travel advice and further restrictions as a result of a second wave in many countries have contributed to a fall in consumer confidence,” said CEO Jacob Schram on Tuesday morning in connection with the presentation of new quarterly figures.
A fall in income of 91 per cent, an operating loss of NOK 2.81 billion in the quarter and a total deficit of a staggering NOK 6.41 billion are among the key figures. Investor and manager Jan Petter Sissener, himself a former shareholder, now believes that Norwegian will go bankrupt.
– I am afraid this is the death knell for Norwegian, Sissener told Nettavisen on Monday.
– Fly with you? Especially!
Schram mentioned consumer confidence, and that it is fragile, there are several signs that indicate. In recent weeks, the airline has responded to Wizz Air’s dumping prices and tried to lure Norwegians to the wings with flight prices of NOK 199. But it does not excite everyone:
«Fly with you before we get a refund for our trip to Munich on April 2, booked in the autumn of 2019 Special. Just forget it!” writes one of many frustrated customers who respond angrily to Norwegian’s Christmas offer for NOK. 199.
Many of the customers have waited a long time to get their money back and are therefore not very impressed with the offer.
«Highway robbery. We are many who are waiting. Therefore, buying tickets from you will be like one lottery. Either one wins the cheap trip, otherwise the money will end up as a long-term loan to a small liquid company “, writes another Norwegian customer on Facebook.
Warned against “cash points”
In addition to the fact that many, due to several thousand canceled flights, are waiting for a refund, there are also very many customers left unused tickets that have been exchanged for a bonus point, or “cash points”, as Norwegian calls it – a cash balance with Norwegian that is tied up in the purchase of a plane ticket within a specified time limit.
While the airline has encouraged customers to switch to “cash points” instead of demanding a refund, the Consumer Council has repeatedly warned against this offer.
One of the reasons is that if the company goes bankrupt, this agreement means that the money is lost for the customer. If, on the other hand, you have demanded that the amount be refunded, the battle is not completely lost:
– If you have demanded a refund, and paid with a credit card, you can go to the card company and ask for the money. You can not do that if you have received “cash points”, then the race is over, says Pia Høst, head of consumer dialogue at the Consumer Council.
Høst believes that several customers have agreed to “cash points” without having a clear picture of the consequences:
– We believe that in some cases they have been led behind the light. There are many who feel cheated.
– Use the opportunity quickly!
Autumn has a clear appeal to customers who are now facing new cancellations from the airline.
– It is about demanding a refund as soon as possible. You are entitled to a refund within seven days of purchase.
– But many who have demanded a refund for a long time have not yet received their ticket money back?
– Then you can go to the credit card company, if you have bought the ticket through the credit card company. Wait for 14 days, and if you have not yet received money from the airline and do not get anywhere by contacting you, you are entitled to use the card insurance.
If you have a Bank Norwegian card, which automatically gives “cash points” of one percent of the purchase amount, this purchase advantage means minimal now, Høst believes. Hundreds of thousands of Norwegians have the Norwegian card.
– We recommend that you use a card with a right of complaint – it is the most important insurance right now, and it should be used, since unfortunately there is a great risk of cancellations and bankruptcies – it applies to travel, but also much more.
– Is there no possibility to go to the company to ask for “cash points” to be converted into cash refunds, now that the financial situation in Norwegian is so precarious?
– No, it is unfortunately run when you have accepted this as a replacement. Then you have committed to buying airline tickets. This shows that the scheme may not be very consumer-friendly, and especially in a situation like this.
The online newspaper has asked Norwegian about the scope of customers as cash points for good, and what sums this amounts to, as well as what the company advises customers to do. The airline will not answer in detail the questions about financial consequences for customers, but will answer this:
– We maintain a number of routes in Norway, and CashPoints can be used as a means of payment when you buy tickets on all these routes. At the same time, we work around the clock to get through this crisis. CashPoints are valid until the end of the year you made the purchase plus two years. Points earned this year will, for example, be valid until 31 December 2022, says Christer Baardsen, senior communications consultant at Norwegian.