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View Full Version : Norwegian posts $49.8M loss...


TheFly
07-13-2017, 03:53 PM
http://m.atwonline.com/airline-financials/norwegian-widens-net-loss-1h?NL=ATW-04&Issue=ATW-04_20170713_ATW-04_151&sfvc4enews=42&cl=article_3&utm_rid=CPEN1000003251876&utm_campaign=10910&utm_medium=email&elq2=9a5b317c9d1a44c7878352dea111556e

Low-cost carrier (LCC) Norwegian posted a first-half net loss of NOK411.9 million ($49.8 million), widened from a net loss of NOK54.7 million for the same period last year.

The fast-expanding carrier made a net profit of almost NOK1.1 billion for 2Q, compared to a profit of NOK745.4 million last time, but this year’s 2Q profit was canceled out by the hefty NOK1.5 billion deficit recorded in 1Q.

Revenue for the first half was up 12%, at just over NOK13 billion, compared to NOK11.6 billion last time.

Over the first half of the year, Norwegian carried almost 15.3 million passengers, up 13% on the 13.6 million carried over the same period in 2016.

Average sector length grew 6% to 1,519km, as more long-haul routes began to take off. The carrier plans to use its incoming fleet of Boeing 737 MAX 8s, with their longer range compared to its existing fleet of 737-800s, to inaugurate a series of transatlantic services between secondary airports. It also has a growing fleet of Boeing 787s for long-haul services.

Capacity for the first half jumped by 22%, to almost 32 billion ASKs. RPKs just failed to keep pace, rising 21% to 27.6 billion km.

As a result, load factor for the half-year was marginally down at 86.2%, compared to 86.6% last time.

Fuel consumption for the half-year also grew considerably compared to the same period last year, up 20% to 651,000 tonnes.

The results for 2Q were slightly down on last year, said Norwegian CEO Bjørn Kjos. While the continuing strength of the carrier’s load factor was satisfactory, he said, “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.”

However, he added, bookings for the coming months were “looking very good.”

The company’s fleet is planned to grow rapidly throughout 2017, with 17 Boeing 737-800s, nine 787-9s and six MAX 8s scheduled to have arrived by year-end.

Additionally, three Airbus 320neos are scheduled to be delivered, which will be leased to Hong Kong carrier HK Express.

Norwegian says that it plans to have 21 Boeing 787s in its inventory by the end of 2017. However, the carrier noted it “may decide to adjust capacity in order to optimize the route portfolio, depending on the development in the overall economy and in the marketplace.”

Alan Dron [email protected]


GogglesPisano
07-13-2017, 04:09 PM
https://i.imgflip.com/1sgu44.jpg

Jaded N Cynical
07-13-2017, 06:20 PM
WSJ
Norwegian Air Shuttle NAS -14.82% served up a reminder Thursday of why disruptive companies don’t always make good investments.

The airline is investing aggressively in cheap trans-Atlantic flights. Last week it announced another raft of new routes between the U.S. and Europe, including $174 fares between Chicago and London from next spring. Norwegian’s long-haul capacity will increase by 60% this year and double next year, notes brokerage Davy.

But rapid expansion has come at a cost. Even stripping out fuel, second-quarter unit costs rose 7% year over year, management announced Thursday. Unit staffing costs ballooned 12% as the company prepared to ramp up intercontinental operations. Second-quarter unit costs, excluding fuel, have now been rising for four years.

This looks like a big problem. You can’t build a low-cost airline without low costs.

Trans-Atlantic flying is currently dominated by three full-service alliances: American Airlines and British Airways parent IAG, Delta and Air France-KLM , and United Airlines and Lufthansa . Having seen their short-haul business upended by low-cost challenger Ryanair , the European players are paying very close attention to Norwegian’s ambitions. All three have launched no-frills long-haul subsidiaries to compete. Norwegian can’t count on the complacency that opened a gap for Ryanair.

The other problem with Norwegian’s mounting costs is that they weigh on cash flows and hence its debt-encumbered balance sheet. Shareholders’ equity accounted for just 8% of total liabilities at the quarter-end. This leverage explains why the stock, which is heavily shorted, plunged 11% in morning trading. Year-to-date it is down more than a third, even as other European airline stocks have soared.

The company’s long-term finance director quit last week. His successor can be under no illusion: If Norwegian really is going to disrupt the current trans-Atlantic oligopoly, it needs to get costs under control.



Suck it Bjorn!


UAL T38 Phlyer
07-13-2017, 06:29 PM
Matt Damon stars in "The Bjorn Identity....Crisis." :rolleyes:

WHACKMASTER
07-14-2017, 10:18 PM
Where's NEDude to spin this one?

NEDude
07-14-2017, 10:27 PM
Where's NEDude to spin this one?

I have no reason to spin this. I am only defending their right to operate as they are doing so within the established rules of the game, and by the same rules many other airlines are using. I have stated numerous times that if their business model fails, then so be it. I guess you have missed that...

Jaded N Cynical
07-15-2017, 07:33 AM
Defending the right to shop the lowest cost labor possible. Sounds noble.

SEPfield
07-15-2017, 05:13 PM
Defending the right to shop the lowest cost labor possible. Sounds noble.

Sounds like whipsawing.

Thank goodness the US Airlines would ever stoop to such devious and underhanded practices.

InThisTogether
07-27-2017, 11:37 PM
The interest rates for their aircraft are costing them a lot of money. If they find enough investors to pay down the cost of the airplanes, they'll be ok. If not, they're in a world of hurt.

METO Guido
07-28-2017, 05:32 AM
The interest rates for their aircraft are costing them a lot of money. If they find enough investors to pay down the cost of the airplanes, they'll be ok. If not, they're in a world of hurt.
Private equity? In exchange for what? A paydown typically refers to companies reissuing debt for less than the initial terms. Lowering of debt through bond maturity repayment for example. In the case of outstanding aircraft leases, the agreements would need to provide for reduction of principal as would be the case in a car loan or credit card balance.

BobSacamano
08-02-2017, 10:54 AM
Norwegian widens net loss in 1H | Airline Financials content from ATWOnline (http://m.atwonline.com/airline-financials/norwegian-widens-net-loss-1h?NL=ATW-04&Issue=ATW-04_20170713_ATW-04_151&sfvc4enews=42&cl=article_3&utm_rid=CPEN1000003251876&utm_campaign=10910&utm_medium=email&elq2=9a5b317c9d1a44c7878352dea111556e)

Low-cost carrier (LCC) Norwegian posted a first-half net loss of NOK411.9 million ($49.8 million), widened from a net loss of NOK54.7 million for the same period last year.

The fast-expanding carrier made a net profit of almost NOK1.1 billion for 2Q, compared to a profit of NOK745.4 million last time, but this year’s 2Q profit was canceled out by the hefty NOK1.5 billion deficit recorded in 1Q.

Revenue for the first half was up 12%, at just over NOK13 billion, compared to NOK11.6 billion last time.

Over the first half of the year, Norwegian carried almost 15.3 million passengers, up 13% on the 13.6 million carried over the same period in 2016.

Average sector length grew 6% to 1,519km, as more long-haul routes began to take off. The carrier plans to use its incoming fleet of Boeing 737 MAX 8s, with their longer range compared to its existing fleet of 737-800s, to inaugurate a series of transatlantic services between secondary airports. It also has a growing fleet of Boeing 787s for long-haul services.

Capacity for the first half jumped by 22%, to almost 32 billion ASKs. RPKs just failed to keep pace, rising 21% to 27.6 billion km.

As a result, load factor for the half-year was marginally down at 86.2%, compared to 86.6% last time.

Fuel consumption for the half-year also grew considerably compared to the same period last year, up 20% to 651,000 tonnes.

The results for 2Q were slightly down on last year, said Norwegian CEO Bjørn Kjos. While the continuing strength of the carrier’s load factor was satisfactory, he said, “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.”

However, he added, bookings for the coming months were “looking very good.”

The company’s fleet is planned to grow rapidly throughout 2017, with 17 Boeing 737-800s, nine 787-9s and six MAX 8s scheduled to have arrived by year-end.

Additionally, three Airbus 320neos are scheduled to be delivered, which will be leased to Hong Kong carrier HK Express.

Norwegian says that it plans to have 21 Boeing 787s in its inventory by the end of 2017. However, the carrier noted it “may decide to adjust capacity in order to optimize the route portfolio, depending on the development in the overall economy and in the marketplace.”

Alan Dron [email protected]

Shocking that Kos would cite "high oil price" as a factor, when oil has been relatively cheap for a few years now. If they can't cut it at these oil prices, they can't make it long term. Seems like a fundamental flaw.

Sniper66
08-02-2017, 01:39 PM
Shocking that Kos would cite "high oil price" as a factor, when oil has been relatively cheap for a few years now. If they can't cut it at these oil prices, they can't make it long term. Seems like a fundamental flaw.







Delta is looking to get all their new airbus deliveries
and United their 787s

They will stick with the 737 and Ryan and Easyjet business plan
Low cost in Europe

METO Guido
08-03-2017, 09:12 AM
Shocking that Kos would cite "high oil price" as a factor, when oil has been relatively cheap for a few years now. If they can't cut it at these oil prices, they can't make it long term. Seems like a fundamental flaw.
Precisely. Dump a load of $229 DEN/CDG seats into the system and cry later about how much fuel that is.

Jaded N Cynical
08-09-2017, 12:06 PM
Norwegian logged 5,669 delays in July


Norwegian logged 5,669 delays in July (http://www.newsinenglish.no/2017/08/08/norwegian-logged-5669-delays-in-july/)

Norwegian Air’s tough summer has so far left it with nearly 6,000 delayed flights and 170 cancellations in July alone, according to new statistics from Flightstats, which delivers airline data globally. Angry passengers are filing complaints and demands for compensation, and getting even more frustratrated when their claims are rejected.

Passengers on Norwegian Air flights have faced delays and cancellations that the airline itself admits are unsatisfactory. This flight from Krakow to Oslo last month was on time.

Newspaper Dagens Næringsliv (DN) reported Tuesday that Flightstats’ statistics were collected from both Norwegian’s Scandinavian-based operations for Norwegian Air Shuttle (NAS), which fly under the airline code DY, and from NAS’ Irish subsidiary Norwegian Air International, which operates under the code D8.

Norwegian operated 9,986 DY flights in July, and fully 27.7 percent of them were delayed by 45 minutes on average. The airline’s D8 flights numbered 8,742 and 35.4 percent of them were delayed by an average of 49 minutes. That put Norwegian’s Irish-based operations, which operate many of the airline’s long-haul flights to the US, near the bottom of the list of European airlines regarding punctuality. Only LOT Polish Airlines and Thomas Cook Airlines performed worse.

Around 170 flights were cancelled, causing great aggravation for stranded Norwegian passengers. State consumer advocacy officials in Norway have claimed that Norwegian Air’s delays and cancellations are systematic, based on a lack of back-up plans and conscious scheduling of ambitious flight programs without the necessary crews and aircraft to fly them.

‘Not satisfied’
Norwegian Air officials have vigorously denied the claims and retorted that rival airlines also suffer delays and cancellations. A Norwegian spokesman admitted, however, that the airline’s performance this summer has been unsatisfactory.

“We are of course not satisfied with either the regularity or punctuality we had in July,” Lasse Sandaker-Nielsen, communications chief for Norwegian, told DN. “Now we must sit down and examine what went wrong this summer. There have been too many long delays and cancellations.” He noted, however, that “it’s important to remember that we have more than 600 flights every day, and most of them are ontime.”

That’s little consolation for passengers who’ve been stranded in Oakland, Oslo, Malaga and other cities this summer. One US passenger recently aired his frustration in an email to newsinenglish.no, describing how his flight from New York’s JFK to London Gatwick was subject to a change of aircraft because its scheduled Boeing 787 Dreamliner “was down for maintenance and they have no spare aircraft.” He and his wife ended up being downgraded from the premium class tickets they’d purchased and put on “an overloaded Boeing 777 operated by a charter company.” Their return flight from London Gatwick to JFK was delayed by more than three hours. His claimed his demands for compensation have been denied and that he’s now contemplating a lawsuit.

Acute growing pains and heavy debt
Most tie all the delays and cancellations to Norwegian’s ambitious intercontinental expansion program that it launched in 2013 after it placed major orders for new 787s. They were plagued by technical difficulties and Norwegian, which is not a member of any airline alliance, had no reserve aircraft available. The company’s huge aircraft acquisition programs, also for new 737s and Airbus jets, have also left the airline saddled with heavy debt. The company’s longtime finance director Frode Foss abruptly quit earlier this summer.

The bad publicity around Norwegian comes amid ongoing speculation that the airline, which has seen its share price dive this year, is an acquisition target. Several published reports, including one in The Economist in July, have cited International Airlines Group (IAG) as a potential buyer along with others keen on consolidating low-fare operations. The airline now remains mostly under the control of founder Bjørn Kjos, a former fighter jet pilot who has seen his own fortunes fall, at least on paper, in line with the share price.

Norwegian, meanwhile, set a new passenger record in July despite all its problems. DN reported that 3,358,565 passengers traveled with the airline last month, the highest number ever carried by the airline in a single month and up 15 percent from July last year. Its yield (revenues per passenger per kilometer) fell, however, by 6 percent.