Norwegian reports increased revenues and reduced losses in Q1

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Norwegian has reported a net loss of NOK 1,489 million for the first quarter (Q1) of this year while it also said it reduced costs, increased revenue and significantly improved on-time performance.

The company’s unit cost excluding fuel decreased by eight per cent during the same period. The total revenue was NOK 8 billion, up 14 per cent and primarily driven by intercontinental growth and increased traffic in the Nordics.

Norwegian said its key priority is returning to profitability through a series of measures, including an extensive cost-reduction program, an optimised route portfolio and sale of aircraft.

The company’s internal cost reduction program #Focus2019 has been implemented, and achieved cost reductions of NOK 467 million in Q1.

The company has also strengthened its balance sheet through a fully underwritten rights issue of NOK 3 billion, which it said secures a stronger financial position.

The company is well positioned to continue to attract new customers, not least in the long-haul market, where the development is stronger than in the short-haul market.

More than eight million passengers flew with Norwegian in Q1, growth of nine percent. The load factor was 81 per cent.

Norwegian chief executive officer, Bjørn Kjos said: “I’m pleased with the positive developments this quarter, despite the 737 MAX issues. We have taken a series of initiatives to improve profitability by reducing costs and increasing revenue.

“We are optimising our base structure and route network to streamline the operation as well as divesting aircraft, postponing aircraft deliveries and not least implementing our internal cost reduction program, which will boost our financials. I am also pleased that booking figures and overall demand for the coming months look promising,”

In March, Norwegian temporarily suspended operation of 18 Boeing MAX 8 aircraft. The company combined flights and booked customers to other departures within Norwegian’s own network, consequently reducing the impact on passengers.

The airline said it will continue to limit passenger disruptions by also offering flights with wetlease companies whenever necessary and the number one goal is to operate its schedule according to plan.

“Our dedicated colleagues at Norwegian have been working day and night to find solutions for our customers. They will continue to do their utmost to ensure that all flights continue to depart as planned, regardless of how long the MAX stays out of service,” Kjos said.

“We have had some productive meetings with Boeing where we have discussed how we can maneuver through the difficulties the MAX situation is causing Norwegian,” Kjos added.