Norwegian Says Long-Haul Expansion Paying Off

Norwegian Air Shuttle swung to an operating profit in the second quarter, as its bet on the long-haul market turned profitable for the first time.

Norwegian, Europe's number three budget airline by passenger numbers behind Ryanair and easyJet, has expanded rapidly with the addition of long-haul flights in 2013, making it the only budget carrier to offer direct flights between Europe and the United States.

"We've reached critical mass in long haul and we now expect a very good development going forward... Not least in the London market," chief executive Bjørn Kjos told an investor presentation.

Norwegian did not give separate earnings numbers for the long-distance operations but Kjos said they had contributed to profits. "We're already there now," Kjos said.

The number of passengers flying on routes between Europe and the United States and Asia rose 130 percent year-on-year and made up close to 5 percent of Norwegian's 7 million passengers and 10 percent of revenue in the quarter.

The company's overall growth in available seat kilometres (ASK) was 8 percent in the quarter, while revenue passenger kilometres grew 15 percent, reflecting the much longer trips taken by many passengers.

Norwegian said it expects available seat kilometres for its long-haul business to grow 30 percent this year and 38 percent next year.

The company's quarterly load factor increased to 85 percent from 80 percent a year before as the increase in passenger numbers outpaced capacity growth.

Earnings before interest and tax (EBIT) reached NOK520.5 million kroner against a loss of NOK85 million in the year-ago period.