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Norwegian Air passenger growth slows
BUDGET carrier Norwegian Air posted smaller-than-expected passenger growth in December and additional losses on fuel hedging, its monthly traffic report showed on Monday.
Norwegian has rapidly expanded its transatlantic business in recent years but has struggled to turn a profit. It expanded capacity in December by 34 per cent year-on-year but revenue-generating passenger kilometres increased by only 24 per cent, lagging a forecast of 32.9 per cent in a Reuters poll of analysts.
For the October to December quarter, Norwegian Air estimated an unrealised loss from fuel hedging of 1.99 billion Norwegian crowns (S$315 million), up from a preliminary October-November loss reported last month of 1.46 billion. The airline's load factor, a measure of how many seats are sold on each flight, fell sharply to 78.6 per cent for the month, lagging a forecast of 82.6 per cent and down from 84.6 per cent a year earlier.
"The company has made considerable investments this year and will now enter a period of slower growth. We have adjusted and optimised our route portfolio and the capacity going forward. We have also made seasonal adjustments for the winter," CEO Bjoern Kjos said in a statement.
"We have launched a series of cost-reduction measures to boost our financials in 2019 which will have an immediate and continued positive influence throughout the year," he said. REUTERS