NORWEGIAN Reports Q1 Loss But Is Hopeful Of A Strong Summer
The low-cost carrier is expecting one of the strongest summers in its three-decade-long history.
Low-cost carrier Norwegian recently reported its financial results for the first quarter of this year, highlighting the airline’s ability to reduce capacity during the quieter winter period before ramping up towards the end of the quarter with the start of a more robust summer program. With encouraging booking numbers, this summer will be one of Norwegian’s strongest ever.
A harsh and limiting winter for the Norwegian
For this year’s first quarter, Norwegian transported approximately 3.8 million passengers, an improvement from the 2.2 million in the first quarter of last year. Production of available seat kilometres was estimated to be 6.0 billion, down about 13% from the previous quarter, as the budget carrier utilized its fleet flexibility to match capacity to seasonally lower demand.
Passenger traffic was 4.9 billion seat kilometres, and the quarterly load factor was 80.9%, highlighting how the provided capacity adjusted well despite the lower demand. With these figures, Norwegian managed to limit its operating loss to approximately NOK 916 million ($85.92 million) and reported a profit before tax amounting to an expected loss of NOK 992 million ($93.05 million).
Fortunately, the airline’s liquidity position improved significantly through the quarter, with cash and cash equivalents at the quarter-end increasing to approximately NOK 8.6 billion ($806.68 million). And given the knock-on consequences of poor weather and the French air traffic control strikes, Norwegian declined expectedly from its regular on-time performance of 99.4% to achieve a decent 83.5%.
Welcoming an exciting and rebounding summer
But even with a harsh winter, Norwegian is confident about the upcoming rebounding summer season with a continued strong booking momentum. When pairing this increasing trend with more routes and higher frequencies to several destinations across the Nordics and Europe, the airline eagerly expects one of the most significant summers in its history.
In particular, Norwegian has been experiencing an increasing demand for travel to France, Italy, and Spain, prompting the addition of more departures to cities like Malaga, Palma, and Barcelona. Geir Karlsen, Chief Executive Officer of the airline, said:
“We are delighted to see that an increasing number of passengers choose to fly with Norwegian, and I look forward to welcoming new and old passengers onboard in what looks like the strongest summer ever. We recommend that customers who need to travel on specific dates and to particular destinations book tickets as soon as possible, as our planes are quickly filling up.”
And to prepare for a possible historic season, the low-cost carrier has taken the necessary steps for improvement. Concerning the overall customer experience, it has welcomed about 150 new employees to its newly-established customer-facing ground handling services at Oslo Airport.
These customer experience additions will ensure Norwegian remains well-prepared to efficiently handle any issues on the ground and in the air. The low-cost carrier is also looking to relaunch the ‘Norwegian Reward’ loyalty program with new benefits available to all members, such as exclusive priority benefits for the most frequent flyers to attract more business travellers.
And last but certainly not least, Norwegian will operate a fleet of 72 aircraft to ensure smooth flying this summer, as Karlsen continued:
“Overall, this quarter is a strong demonstration of our ability to adjust capacity to seasonal fluctuations in demand and to prepare well for the busy summer travel season ahead. Ahead of the summer season, we have phased in eleven latest generation aircraft and welcomed many new colleagues. I am thrilled that we will not depend on wet lease capacity this summer. Instead, we can serve our customers entirely with our aircraft and crew.”