Norwegian loses $176M in 1Q 2017
Norwegian reported a significant loss in the first quarter of 2017 despite the passenger growth. The LCC ended the first quarter of 2017 with a loss of NOK1.5 billion or $176.04 million, compared to NOK800 million ($93.89 million) loss in the first quarter of 2016.
Although strong passenger growth, higher fuel costs, tough competition and a stronger NOK currency contributed to the negative result. This year’s Easter led to a shift of income over to April, as last year’s Easter was in March, Norwegian said.
The airline carried 6.7 million passengers in the first quarter, an increase of 14%. Norwegian’s strongest growth was in the U.S., Spain and France. In the Nordics, the passenger growth was 6%. The capacity growth was 24% and the load factor was 84%. According to the airline, it was marginally down in a quarter traditionally characterized by less demand and travel.
Norwegian’s global growth strategy will provide economies of scale and lower unit costs. During the first quarter, unit costs excluding fuel fell by 4% and debt was cut by NOK1 billion ($117.36 million). Cash and cash equivalents at the end of the quarter was NOK4.8 billion ($563.34 billion).
Norwegian CEO Bjørn Kjos said: “In this quarter, we particularly see the effects of higher fuel costs combined with a strengthened krone against the British pound, euro and Swedish krona, which accounts for almost half of our sales. In addition, the figures are affected by the fact that Easter was not in the first quarter, like last year. At the same time, we are filling aircraft and attracting more passengers both in new and more established markets. Our long-haul operation is now well established, proving that customers want affordable fares and new aircraft on intercontinental routes.”
Norwegian launched 39 new routes during the first quarter, including routes between the U.S. and Ireland, Northern Ireland, Scotland and Norway. During the first quarter of 2017, Norwegian took delivery of seven brand new Boeing 737-800 aircraft, as well as one Boeing 787-9 Dreamliner.
In April the company announced three new intercontinental destinations from London Gatwick to Singapore, Denver and Seattle.
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