Norwegian Air passenger growth slows, fuel losses increase
Budget carrier Norwegian Air posted smaller than expected passenger growth in December and recorded additional losses from fuel hedging positions, its monthly traffic report showed on Monday.
The airline, which has been courted by Aer Lingus owner IAG, has rapidly expanded its transatlantic business in recent years, but has struggled to turn a profit amid tough competition.
While the airline's capacity grew by 34pc year-on-year in December, revenue-generating passenger kilometres increased by only 24pc, lagging a forecast of 32.9pc in a Reuters poll of analysts.
Meanwhile for the October-December quarter, Norwegian Air estimated an unrealised loss from fuel hedging amounting to NOK1.99bn (€202m), an increase from the preliminary October-November loss reported last month of NOK1.46bn (€194m).
The airline said it has implemented a series of cost-reduction measures to boost its financials in 2019.
The company carried 37.34 million passengers in 2018, an increase of 13pc compared to the previous year. The full-year load factor was 85.8pc, down from 87.5pc in 2017.
"The 2018 traffic figures demonstrate that our international footprint continues to grow stronger, in line with the Norwegian’s strategy. The company has made considerable investments this year and will now enter a period of slower growth," Norwegian CEO Bjørn Kjos said.
"Continued tough competition, high oil prices and operational challenges in 2018 combined with the issues with Rolls Royce engines, which have particularly affected our long-haul operations, have had an impact on our financial results in the latter half of 2018."
"We have launched a series of cost-reduction measures to boost our financials in 2019 which will have an immediate and continued positive influence throughout the year" Mr Kjos added.
During 2018, Norwegian took delivery of 25 brand new aircraft and launched 35 new routes, primarily between Europe and the US.
The airline also launched a direct route between London and Buenos Aires.
(Additional reporting Reuters)