Flying Fit: Norwegian Reports Double Profits in 2nd Quarter

Norwegian (NAS) has reported a doubling of profits in the second quarter of 2016 compared to the same period last year.

• The airline’s pre-tax earnings (EBT) was NOK 930 million (£83million/€99million/$110million), which is double the profit reported last year NOK 456.
• Total revenue for the second quarter was NOK 6.6 billion (£594million/€707million/$785million). This is an increase of 13% from the same quarter last year.
• Norwegian’s ASK (Available Seat Kilometres) increased by 12% this quarter, and traffic (RPK) increased by 16%. Norwegian maintains its growth estimate of 18% (ASK) for this year.

“I am very pleased with the improved result and record high load factor for this quarter,” said Norwegian’s CEO Bjørn Kjos.

“However, we have had significant additional costs for leasing of aircraft and passenger compensation. Over the summer, we will phase out the wet-leased aircraft,” he added.

The airline wet-leased aircraft to meet high demand this summer while it waited for new aircraft deliveries, and offered customers compensation if they expressed disappointment at not flying on Norwegian’s own planes.

All On Board

The airline maintained a load factor of 88% during the second quarter, an increase of three percentage points over last year.

The airline carried 7.7 million passengers during the second quarter, an increase of 11%.

The strongest growth in passengers numbers was in Stockholm Arlanda, London Gatwick and Norwegian’s Spanish bases. Norwegian established a new base in Palma this quarter, and now serves domestic routes in Spain.

“Bookings and pre-sales for the coming months are looking very good,” said Kjøs, who also celebrated recent awards the airline has received.

“This would never be possible without all the dedicated people working at Norwegian,” Kjøs added.

Planes Planes Planes

With fuller aircraft, the airline reports a significant reduction in CO2 emissions per passenger kilometre (RPK). Its overall environmental impact is also improved by the airline’s commitment to flying more efficient an environmentally-friendly new aircraft.

So far this year, Norwegian has introduced two new fuel-efficient next generation Boeing 737 Dreamliner aircraft and 10 new Boeing  737-800 aircraft to its fleet.

Norwegian currently has 10 Dreamliner long-haul aircraft and that number will increase to 42 Dreamliners within a few years as Boeing delivers on open orders.

The airline group has announced it will buy 30 new A321LR (Long-Range) planes, with deliveries starting in 2019 when the aircraft type is launched.

Slight Delays

Norwegian has faced strong objections and unprecedented regulatory indecision on the granting of the operating licences it needs to launch of long-haul service to the U.S. for its Irish subsidiary, Norwegian Air International, and its UK subsidiary Norwegian UK.

Though the failure to grant U.S. licenses to these divisions has had negative impact on the Irish companies and airports which support the Irish carrier, and have proven a nuisance for the UK partners waiting for launch of that service, none of this has stopped Norwegian from growing by offering customers a comfortable flying experience at an affordable price.

Norwegian offers customers free high-speed Wi-Fi onboard in Europe and on all flights it offers a variety of in-flight entertainment options including wireless In-Flight Entertainment and Live TV in Europe, and state-of-the-art seat-back Audio Video On Demand entertainment on its long-haul routes.

Norwegian’s Norway-based NAS continues to offer long-haul service to the U.S., and other popular vacation destinations around the world.

Norwegian announced its first-ever charter contract in the U.S. this week, valued at 120 MNOK (£10million/€12milion/$13million), through a deal signed by all-inclusive vacation leaders Apple Vacations and Funjet Vacations.

This new charter contract will be served by three of the group’s 737-800 aircraft, based in Milwaukee and Chicago, from December 2016 to April 2017, and will help Norwegian get better utilisation of its fleet during Europe’s low travel winter season.

Norwegian also offers seasonal scheduled service from the U.S. East Coast to sunny vacation destinations in the French Caribbean. These U.S. flights to Guadeloupe and Martinique will resume this autumn.