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Budget carrier Norwegian Air Q2 misses forecast, outlook dims
[OSLO] Norwegian Air Shuttle reported earnings significantly below forecasts for the second quarter on Thursday and cut its outlook for growth, while costs were seen rising more than the budget carrier had previously expected.
"We have had significant additional costs for leasing of aircraft, high oil price and the air passenger tax implemented by the government of Norway last year, which have had a negative impact on the result," Chief Executive Bjoern Kjos said in a statement.
Norwegian Air now expects its available seat kilometres, known as production growth, to increase by 25 per cent in 2017, down from a previous estimate of 30 per cent, while its unit cost forecast was raised to 0.42 crowns from a 0.39-0.40 crowns range.
Norwegian Air's chief financial officer abruptly resigned on July 6 after 15 years at the company, sending its shares tumbling, although the airline made no mention of its earnings at the time.
April-June adjusted operating profit before leasing and depreciation (EBITDAR) fell to 1.19 billion crowns (S$198.3 million), down 21 per cent year-on-year and below analysts' forecast in a Reuters poll of 1.51 billion crowns.
Norwegian Air's operating result swung to a loss of 863 million crowns from a year-ago profit of 1 billion, while analysts had expected a loss of 246 million.