Budget carrier Norwegian Air Shuttle has reported a fourth-quarter net loss, citing high fuel costs and a strong US dollar, but said it expected strong demand ahead.
Details
The October-December net result swung to a loss of 119 million crowns ($11.69 million), from a profit of 112 million a year earlier.
The fourth quarter, normally a slow period for holiday travel, saw record-high fuel prices, a strong dollar and "sweeping industry challenges across European airports", the airline said in a statement.
Still, it maintained that the situation would improve.
It said its capacity - as measured by available seat kilometres (ASK) - is expected to rise by 24% this year, while the revenue earned from each passenger would rise and the costs were likely to fall.
For the summer of 2023, Norwegian plans to operate 81 aircraft, down from the 85 aircraft it had previously planned for.
The budget airline had a total fleet of 70 Boeing aircraft in its fleet by year-end, up from 69 three months earlier.
It has since announced it would lease six additional Boeing 737 MAX 8, from Air Lease Corporation (ALC), with delivery well ahead of the Northern hemisphere summer season.
Norwegian emerged from government-backed bankruptcy proceedings in May 2021 after shedding much of its debt and transatlantic network.
Flyr AS, a newcomer which emerged at the end of the pandemic curbs on air travel at the same time, filed for bankruptcy two weeks ago, having failed to raise enough cash to survive the winter season.
The region's legacy player, SAS, is undergoing a reorganisation under US Chapter 11 bankruptcy protection proceedings.
Norwegian Air Eyes 20% Gain In Summer Ticket Prices On Solid Demand
The above news was followed by news that budget carrier Norwegian Air has raised summer 2023 ticket prices by about 20%, its CEO told Reuters, reflecting mostly solid demand despite inflationary pressures.
Norwegian Air emerged from government-backed bankruptcy proceedings in May 2021 after shedding much of its debt and its transatlantic network.
"Based on what we have sold as per today, for the summer, we are about 20% higher than for the same period last year," Geir Karlsen said on the sidelines of an earnings presentation.
The higher prices also partly reflect Norwegian's increased attention on business customers, having improved its product and punctuality, which these customers expect, Karlsen said.
"We are beating our competitors on these areas," Karlsen told a news conference earlier. "We have been doing that for a while now."
The Nordic airline market, although tough, is less crowded than Norwegian - currently flying at 30% of capacity - had envisioned in the autumn.
Flyr, a newcomer which emerged at the end of the pandemic curbs on air travel, filed for bankruptcy two weeks ago, having failed to raise enough cash to survive the winter season.
Norwegian has chosen to currently fly less than legacy player SAS, which Norwegian considers its closest competitor, Karlsen said. SAS is undergoing a reorganisation under US Chapter 11 bankruptcy protection proceedings.
Other competitors were being cautious, he added.
"We are seeing players such as EuroWings at Arlanda (airport in Stockholm) is not coming in with capacity that they had been (planning), and Ryanair ... not starting up a Copenhagen base this year, which they had been planning to do," said Karlsen.
European airlines have reported solid holiday demand despite concern recessionary pressures could curb travel. Holiday group TUI earlier this week said it was seeing encouraging booking trends for summer and next winter as customers return following a pandemic hiatus.
While the market for flights out of Sweden and Finland look challenging, demand from Norway and Denmark has been solid, Karlsen said.
"The macro effect is hard to say anything about, but we don't see a downward effect in our bookings," he said.
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