Even before Norwegian Air Argentina embarked on its maiden flight in October 2018, the industry was sceptical about the project. «Argentina is a complex environment, for example in terms of unions and ticket pricing regulations,» said Holger Paulmann, head of Chile's low-cost airline Sky Airline, in an interview with aeroTELEGRAPH. «Norwegian must be careful not to be too distracted from their home market of Europe by this start-up in Argentina». Because there the airline is «also not known for being particularly profitable», Paulmann warned.
Now the Norwegians hits on the brake and pull out of Argentina, as they announced on Wednesday (December 4). «Norwegian Air Shuttle has signed a contract for the sale of 100 percent of its Argentinian subsidiary Norwegian Air Argentina to Jetsmart Airlines,» the company states. The sale is one of the necessary steps to become profitable again, said the airline's interim boss, Geir Karlsen. A sale price was not mentioned.
Profitable business impossible
Karlsen explained that most of the costs for the operation in Argentina were incurred in dollars, while the revenues were in pesos. The strong devaluation of the Argentine currency against the American currency prevented a profitable business. The South American expansion took place under the then Norwegian boss Bjørn Kjos.
Jetsmart will take over the operation of Norwegian Air Argentina with immediate effect and replace the three Boeing 737s with its own Airbus A320s within the next six months. The Boeing jets will then return to Europe and fly there for Norwegian.
Jetsmart expands in South America
The Chilean low-cost airline Jetsmart was launched in 2017 as a competitor of Sky Airline on domestic routes. They later went into Argentina with a base at El Palomar Airport near Buenos Aires. With the purchase of Norwegian Air Argentina, the airline now also has access to Buenos Aires Jorge Newbery Airport, commonly called Aeroparque.
From Chile Jetsmart now also flies to Peru and prepares routes to Colombia. The airline belongs to the Indigo Partners, which also holds stakes in Wizz Air in Hungary, Volaris in Mexico and Frontier Airlines in the USA.
