(Bloomberg) -- Norwegian Air Shuttle ASA replaced its chief executive officer after exiting insolvency proceedings, as the low-cost airline rebuilds its operations as a regional carrier.
The board voted to end the contract of CEO Jacob Schram, according to a statement Monday. He was replaced by Chief Financial Officer Geir Karlsen, who spent about six months as interim CEO in 2019.
Karlsen is credited with leading the company's financial reconstruction, according to the statement. Norwegian secured court approval in March for the overhaul, which saw the carrier pivot away from discount long-haul flights, restructure its balance sheet and bring in new investors. The reconstituted company is targeting the European market from its base in the Nordics.
“Further efforts will be made to strengthen Norwegian´s position as a low-cost airline and to return the company to sustainable profitability,” Chairman Svein Harald Oygard said in the statement.
Schram, who spent decades as an executive at fast-food, convenience-store and gas-station chains, was brought in to lead Norwegian in November 2019, when its viability was being openly questioned by rivals. At the time, the company touted his “extreme” customer focus.
He is entitled to a nine-month notice period and 15 month of severance pay. The board sought to “bring the severance payments to a level reflecting the challenges of the industry, but no agreement could be reached,” the company said.
Read more: Norwegian Air Names Ex-Gas Station Executive Schram as CEO
Norwegian sought insolvency protection in Irish courts in November 2020, and secured court approval for the restructuring in March.
The carrier was struggling even before the coronavirus crisis stunted air travel after going head-to-head with discounters including Ryanair Holdings Plc in Europe and taking on British Airways in trans-Atlantic markets.
As part of the restructuring, Norwegian raised 3.73 billion kroner ($430 million) in a private placement as one of its final steps before exiting insolvency proceedings.
Shares of Norwegian were up less than 1% at 9:02 a.m. in Oslo. The company has a market value of 7.3 billion kroner.
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