Norwegian looks at recovery positives as it records operational loss in September quarter

Norwegian Air Shuttle has enough reasons to celebrate this year for the mere reason it survived the pandemic. The highly leveraged carrier entered COVID-19 in a period where already there were talks about its viability. The airline, therefore, celebrated the disclosure of its Third Quarter financial results this past week.

Ads

The company registered a net profit of NOK169 million – EUR17.12 million, boosted by a non-current financial item of NOK464 million – EUR46.99 million. More importantly, Norwegian’s result before this special item was at a loss of NOK295 million (EUR29.88 million).

While a loss may always raise eyebrows, especially considering that Norwegian is a low-cost carrier, which in theory should reap profits before everyone else, comparatively the company is leaving the pandemic much leaner than before.

The biggest proof of that is the figure of the airline’s net interest-bearing debt; if in the same quarter last year the number was of impressive NOK48.523 billion (EUR4.91 billion), today the airline’s indebtedness lies at NOK641.5 million, or EUR64.97 million, given the company’s restructuring settlements with creditors during the pandemic.

So if before COVID, Norwegian Air Shuttle was an airline with long-haul routes and loads of bases in several European countries, it is now a much smaller player, centered in markets where it was already successful pre-pandemic: Scandinavia.

Ads

Most importantly, the group has NOK7.632 billion in cash (EUR773.24), which the airline hopes will suffice to endure what it reckons to be a «traditionally more challenging» Winter season.

Currently Norwegian’s fleet is composed of 51 Boeing 737s, and it signed a letter of intention for 13 more, in the same day of the results announcement.

The airline says that it is targeting a capacity of 29 billion ASKs for the upcoming year, which, extrapolating this quarter’s capacity into a full year, would be a capacity growth of 85.2%.

And Norwegians expects to do so profitably. In October, it already saw a load factor of about 80%, that’s up from the last quarter’s 73%; and although it says that fares are «still too low», but that there are signs of improvement going forward.