Norwegian Air Reports Positive Second Quarter
Norwegian Air reported its second quarter results on Thursday, with net profit jumping 45 percent from the same period last year.
The net profit of NOK1.08 billion (USD$130.9 million), from 2Q16’s NOK745.4 million, was on an operating revenue increase of 17 percent to NOK7.77 billion. EBITDAR earnings for the period came in at NOK1.19 billion, a 21 percent drop on last year.
Operating expenses, however, jumped 45 percent to NOK6.78 billion as the low cost carrier expanded rapidly. Fuel was the biggest expense at NOK1.74 billion, a 38 percent rise on last year, with jet fuel prices increasing by 15 percent in the quarter.
Labour costs of NOK1.26 billion were up 34 percent as staff numbers rose to handle the increased flying. Maintenance expenses rose by 56 percent to NOK647 million on the back of the airline’s expanded fleet.
Norwegian flew 8.62 million passengers in the quarter, up from 7.72 million in the second quarter of 2016. RPK (revenue passenger kms) traffic rose 19 percent, as did the airline’s ASK (available seat kms) capacity. Load factor edged down by 0.1 of a percentage point to 87.7 percent.
“I am very pleased with the high load factor for this quarter,” Norwegian’s chief executive Bjørn Kjos said. “However, we have had significant additional costs for leasing of aircraft, high oil price and the air passenger tax implemented by the government in Norway last year, which have had a negative impact on the result.”
He said bookings and pre-sales for the coming months were “looking very good.”
Results for the first half to end June were less positive as the first quarter’s NOK1.5 billion loss outweighed the 2Q profit. The net loss for the first half was NOK411.9 million, down from 1H16’s NOK54.7 million loss.
Norwegian said it added four leased Boeing 787s and 19 leased 737-800s to its fleet over the previous 12 months. At the end of June it also received its first two 737 MAX aircraft, which took its fleet total to 133.