Norwegian raises more cash as its losses deepen
Low cost carrier Norwegian is raising fresh capital, plans to sell some of its aircraft and it’s also considering offloading its loyalty programme to pay for its rapid expansion.
The airline announced this week that its first quarter losses were higher than last year despite a leap in revenue.
The airline plans to raise NKr1.3billion ($165 million) through a private placement, it announced yesterday.
It will sell five Airbus 320neo aircraft to raise a further $15 million to $20 million.
The airline said it has also started a strategic review of its Reward programme to look at ‘its incorporation and possibly ownership’.
Norwegian said its pre-tax loss for the first quarter was expected to be NKr2.6 billion compared with a NKr 1.8 billion loss last year. During the same period, revenues were up by almost a third to NKr 7.1 billion.
In a statement, the airline said: "Additional capital will boost competitiveness and protect existing and future investments in a market characterised by higher oil prices and fluctuating currencies.
"The company is now positioning itself for the final stages of a strong growth period that has lasted for several years and will reach its peak by the second quarter of 2018."
Norwegian said that both fuel prices and exchange rates were worse than it had previously estimated. Fuel was 8% higher in the first quarter and the euro 8% stronger than expected.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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