Norwegian posts $49.8M loss...
07-13-2017, 03:53 PM
#1
Gets Weekends Off
Thread Starter
Joined APC: Feb 2006
Position: Seat 0B
Posts: 2,300
Norwegian posts $49.8M loss...
http://m.atwonline.com/airline-finan...8352dea111556e
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]
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]
07-13-2017, 06:20 PM
#3
Gets Weekends Off
Joined APC: Apr 2013
Posts: 263
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!
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!
07-14-2017, 10:27 PM
#6
Gets Weekends Off
Joined APC: Mar 2007
Posts: 1,067
Originally Posted by WHACKMASTER
Where's NEDude to spin this one?
07-15-2017, 05:13 PM
#8
Gets Weekends Off
Joined APC: Jan 2016
Posts: 416
Originally Posted by Jaded N Cynical
Defending the right to shop the lowest cost labor possible. Sounds noble.
Thank goodness the US Airlines would ever stoop to such devious and underhanded practices.
07-28-2017, 05:32 AM
#10
Gets Weekends Off
Joined APC: Apr 2011
Posts: 1,473
Originally Posted by InThisTogether
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.
Thread
Thread Starter
Forum
Replies
Last Post
