Norwegian profits down during third quarter

Dino D'Amore
By Dino D'Amore October 27, 2014 17:09

Norwegian profits down during third quarter

Norwegian Air Shuttle posted a pre-tax result (EBT) of 505 MNOK during the third quarter, compared to 604 MNOK the in the year-ago quarter. The costs associated with wet-leasing replacement aircraft and a weak Norwegian Krone (NOK) significantly affected the figures, the airline said, which also blamed the US Department of Transportation for delayed approval of its US flights and costs associated with flight delays.

Even with strong passenger growth, the load factor was high and increased by three percentage points to 85 percent in the third quarter. Norwegian carried 7.1 million passengers this quarter and the company’s operations at London Gatwick had the strongest passenger growth.

Norwegian reports strong growth in all European markets with a capacity increase of 36% and a load factor of 85% in its third quarter results.

Wet-leasing replacement aircraft and extra fuel, as well as accommodation, food and drink for delayed passengers also created extra costs. The costs associated with the long overdue application before the US Department of Transportation for a foreign air carrier permit for Norwegian’s Irish subsidiary, Norwegian Air International were also considerable. The application is in full accordance with the Open Skies Agreement between the EU and the US.

“We’re very satisfied that throughout our world-wide route network, an increasing number of new passengers choose Norwegian. Norwegian has recently received several international awards and was even named ‘Europe’s best low-cost airline’ the second year running. However, we have also experienced some turbulence this quarter. Our results are affected by additional costs related to the pending U.S. permit for our subsidiary in Dublin, consequently reducing our ability to optimize our fleet of aircraft. Even though technical difficulties with our Boeing 787 Dreamliners have also caused additional costs, our long-haul operation now consists of more aircraft and improved reliability.  Looking into 2015, we will see a year of consolidation and lower growth. Next year, our fleet of short-haul aircraft will consist exclusively of Boeing 737-800s as older Boeing 737-300s will be phased out,” said CEO Bjørn Kjos

Dino D'Amore
By Dino D'Amore October 27, 2014 17:09