Norwegian Air fires CEO in ‘surprise’ move after restructuring

Norwegian Air has sacked Chief Executive Jacob Schram who led the budget carrier through restructuring and said it was promoting Chief Financial Officer Geir Karlsen to the top job with immediate effect.

The board voted on June 20 to end Schram’s 18-month tenure but the airline said he would support the carrier on a full-time basis during his notice period up to March 31.

“The board’s decision to fire me came as a big surprise,” Schram told Reuters.

His replacement, Karlsen, has been chief financial officer since 2018. For six months in 2019, he was acting CEO for the carrier, which is recovering from bankruptcy protection after the COVID-19 pandemic plunged the heavily indebted airline into a financial crisis.

The survival plan ended Norwegian’s long-haul business, leaving a slimmed-down carrier with Nordic and European routes.

The company declined to elaborate on Schram’s departure but said his replacement was the right person for the job.

“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,” said Svein Harald Oeygard, the chair of Norwegian’s board.

The board tussled with Schram over his severance package, which gives him the right to 15 months pay on top of the nine-month notice period, or 14 million crowns over 24 months.

“An effort has been made by the board to bring the severance payments to a level reflecting the challenges of the industry, but no agreement could be reached,” Norwegian said.

Schram said he had been willing to make concessions to adjust his pay, but also said no agreement had been reached.

The chair, Oeygard, was appointed in early June after those proceedings were completed and new equity capital was secured.

The search for a new CFO commences immediately.

By Nora Buli & Victoria Klesty www.reuters.com