Norwegian flies back into the black

Norwegian flies back into the black

Europe’s third-largest low-cost carrier, Norwegian, flew into the black last year with a pre-tax result improving by £137 million or 1.7 billion Norwegian krone [nok] over 2014.

The airline reported an annual net profit of £6 million or 75 million nok, but chief executive Bjørn Kjos warned that plans to introduce a passenger tax in Norway is creating an "uncertain situation".

The full-year figure for last year was heavily influenced by an unrealised loss on fuel hedging for 2016 and 2017, which makes up 800 million nok.

Adjusted for such unrealised hedging, the 2015 pre-tax result was £70 million or 875 million nok against a loss of 1.168 million nok the previous year, according to the airline

The company’s total revenue grew by 15% to £1.8 billion as carryings rose by 7% year-on-year to almost 26 million passengers.

The load factor increased by four percentage points to 86%.

Norwegian reported a net loss of of 703 million nok in the fourth quarter of 2015 mainly related to fuel hedging for 2016 and the depreciation of the Norwegian krone.

Total turnover in the fourth quarter increased by 16% was to 5.3 billion nok over the same quarter in 2014.

International traffic increased by 19% and domestic Scandinavian carryings rose by 5% in the three months to give total carryings of 6.13 million.

Norwegian operates 20 bases worldwide and opens its first in Italy at Rome Fiumicino airport on March 27.

The airline’s low-cost long-haul fleet of Boeing 787 Dreamliners, which operate transatlantic rotes from Gatwick, is set to grow to 12 by the end of 2016.

Kjos said: “Norwegian is establishing and preparing for an organisational structure that will secure cost efficient international expansion and necessary traffic rights for the future.

“In February 2016, Norwegian reached an agreement with cabin crew in Norway and Denmark. The new collective agreements are for a two-year period and will secure a steady foundation for the coming years.”

He added: “We enter 2016 with favourable fuel costs and one of the youngest fleets in Europe, which presents a significant competitive advantage.

“We see a good demand for quality flights at affordable fares, but the unpredictable political decision to introduce passenger tax in Norway is creating an uncertain situation in this market.

“It is a paradox that the company with the lowest emissions seems to be punished the hardest.”


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