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Loss hits Norwegian Air but ‘better this year’

February 20, 2018 Headline News No Comments Email Email

Norwegian Air has launched ambitious routes to South America and is determined to lead the market in budget transatlantic flights, but the stresses seem to be showing, with the airline posting a bigger than expected loss for the final quarter of 2017.

Norwegian, officially named Norwegian Air Shuttle, is Europe’s third-largest cut-price carrier (after Ryanair and easyJet). It has big Asian ambitions. See Norwegian launches to Argentina and will expand Asia

Its fourth-quarter results saw the Scandinavian carrier record a net loss of NOK 919 million AUD 149 million), a big dive from the profit of NOK 197 million (AUD 32 million) it posted for the corresponding period a year previously.

Britain’s Financial Times noted that the result “has added to growing concerns about its rapid expansion and the pressure this is putting on costs”.

Norwegian’s chief executive, Bjorn Kjos, said he was “not at all satisfied” with the airline’s 2017 results. He added, however, that the year had been characterised by global expansion driven by new routes, high load factors and continued fleet renewal – and the airline was far better positioned for 2018.

Norwegian Air chief executive Bjorn Kjos

The airline has grown hugely and expects to grow further, increasing capacity by 40% this year, compared with 25% last year.

Norwegian first launched transatlantic services from London Gatwick to the US in 2014. It has since flown more than 2 million passengers on its transatlantic routes at London Gatwick. The airline flew more than 5.1 million UK passengers in 2017.

It is now beginning a series of new long-haul routes using B787 Dreamliners. These include the flights to South America and new direct services to Chicago and Austin in March.

Norwegian wants to boost its appeal to business travellers, Kjos said. The airline will add 21 more Premium seats to its B787 Dreamliners, with lounge access included with Premium tickets. Norwegian also has plans to increase frequency on key routes from Gatwick to give business customers more flexibility.

Written by Peter Needham

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