Profits slump at Norwegian
Low-cost carrier Norwegian saw pre-tax profits slump in the third quarter of the year, which it blamed on the cost of leasing replacement aircraft and the weak Norwegian Krone.
Profits were down to 505 million Krone, down from 604 million in the same quarter last year.
The airline’s capacity increased 36% during the period and, due to strong passenger growth, its load factor increased three percentage points to 85%.
Norwegian said it had seen strong growth in all European markets, but it said it’s results had been hit by the delayed approval from the US for transatlantic flights, costs associated with flight delays including providing food and drink for delayed passengers.
"The costs associated with the long overdue application before the US Department of Transportation for a foreign air carrier permit for Norwegian’s Irish subsidiary, Norwegian Air International were also considerable," it said.
"Our results are affected by additional costs related to the pending U.S. permit for our subsidiary in Dublin, consequently reducing our ability to optimize our fleet of aircraft," said CEO Bjørn Kjos.
"Even though technical difficulties with our Boeing 787 Dreamliners have also caused additional costs, our long-haul operation now consists of more aircraft and improved reliability.
"Looking into 2015, we will see a year of consolidation and lower growth. Next year, our fleet of short-haul aircraft will consist exclusively of Boeing 737-800s as older Boeing 737-300s will be phased out."
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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