Wednesday 12 December 2018

Norwegian Air struggles to fill planes as fleet grows

Photo: Bloomberg
Photo: Bloomberg
Independent.ie Business Desk

Independent.ie Business Desk

Budget carrier Norwegian Air struggled to fill its aircraft in November as capacity growth far outpaced demand, its monthly traffic report showed, sending its shares down 6pc in early trade.

The company, which has been courted by Aer Lingus owner IAG, has ramped up its transatlantic business but has also said that growth will slow as it prioritises profitability over expansion.

"Several of our summer routes have been extended into November, which has affected the load factor," Chief Executive Bjoern Kjos said in a statement.

"A full transition into the winter programme will take place early next year, once the busy holiday season is behind us."

While the airline's capacity grew 34pc year-on-year in November, revenue-generating passenger kilometres increased by 26pc, lagging a forecast of 33.7pc in a Reuters poll of analysts.

The load factor, a measure of how many seats are sold on each flight, fell to 78.8pc for the month, the lowest since May 2014. That fell short of a forecast of 82.7pc and was down from 83.7pc a year ago.

"Overall, we find the traffic figures to be soft," Danske Bank analyst Martin Stenshall said in a note to clients.

On the positive side, the company's November yield, a key measure of revenue per passenger carried and kilometres flown, was unchanged year on year at 0.33 Norwegian crowns. Analysts had expected it to ease to 0.32 crowns.

Norwegian's shares were down 5.7pc lower at 201 Norwegian crowns at 0805 GMT, against a 1.1pc drop for the Oslo benchmark index.

Reuters

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