Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Norwegian Air struggles to fill planes as fleet grows

Published 12/06/2018, 03:23 AM
Updated 12/06/2018, 03:23 AM
© Reuters. FILE PHOTO: File photo shows Boeing 737-800 aircrafts belonging to budget carrier Norwegian Air at Stockholm Arlanda Airport

© Reuters. FILE PHOTO: File photo shows Boeing 737-800 aircrafts belonging to budget carrier Norwegian Air at Stockholm Arlanda Airport

By Ole Petter Skonnord and Terje Solsvik

OSLO (Reuters) - Budget carrier Norwegian Air (OL:NWC) struggled to fill its aircraft in November as capacity growth far outpaced demand, its monthly traffic report showed, sending its shares down 6 percent in early trade.

The company, which has been courted by British Airways owner IAG (L:ICAG), has ramped up its transatlantic business but has also said that growth will slow as it prioritizes 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 program will take place early next year, once the busy holiday season is behind us."

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

The load factor, a measure of how many seats are sold on each flight, fell to 78.8 percent for the month, the lowest since May 2014. That fell short of a forecast of 82.7 percent and was down from 83.7 percent 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 kilometers flown, was unchanged year on year at 0.33 Norwegian crowns. Analysts had expected it to ease to 0.32 crowns.

© Reuters. FILE PHOTO: File photo shows Boeing 737-800 aircrafts belonging to budget carrier Norwegian Air at Stockholm Arlanda Airport

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

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.