© Reuters. Norwegian Air CFO Geir Karlsen is seen in Oslo, Norway May 26, 2021. REUTERS/Victoria Klesty/Files

By Nora Buli and Victoria Klesty

OSLO (Reuters) -Norwegian Air has sacked Chief Executive Jacob Schram and the budget carrier which has emerged from bankruptcy protection 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, although he will continue to support the carrier on a full-time basis during his notice period up to March 31, the airline said.

Karlsen has been chief financial officer since 2018 and was acting CEO for six months in 2019 for the carrier, which is coming out of bankruptcy protection after the COVID-19 crisis 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 severence package, which gives him the right to 15 months pay on top of the nine-month notice period.

“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 could not immediately be reached for comment.

Bankruptcy courts in Oslo and Dublin last month gave their approval for Norwegian to sharply cut its debt by converting it to stock and to raise new capital.

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

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

The search for a new CFO commences immediately.

($1 = 8.6651 Norwegian crowns)