You are here
Rising fuel costs hurt budget carrier Norwegian
[OSLO] Low-cost airline Norwegian Air Shuttle posted on Thursday a larger than expected quarterly loss due to rising fuel prices, a strong local currency and calendar effects.
The third largest low-cost carrier in Europe after Ryanair and Easyjet lost nearly 1.5 billion kroner (244 million euros) in the first quarter after losing 800 million kroner a year earlier.
Its share price promptly dropped at the opening on the Oslo stock exchange, falling by 3.4 per cent, but then recovered to post a 3.6 per cent rise around 0800 GMT.
"In this quarter, we particularly see the effects of higher fuel costs combined with a strengthened krone against the British pound, euro and Swedish krona, which accounts for almost half of our sales," CEO Bjorn Kjos said in a statement.
Recovering global oil prices boosted the currency of Norway, an oil exporter, at the start of the year. This meant that foreign earnings translated into fewer kroner, the airline's reporting currency.
"In addition, the figures are affected by the fact that Easter was not in the first quarter, like last year," he added.
Norwegian carried 6.7 million more passengers, a 14 per cent rise which the company said was fuelled by the US, Spanish and French markets.
Revenues rose by nine per cent to 5.4 billion kroner.
Its gross operating loss (Ebitda) was 1.3 billion compared to 606 million in the first quarter of 2016.
In the first quarter, Norwegian launched 39 new routes, including long-haul and additional transatlantic routes.
But its fill rate deteriorated slightly, to 84.4 per cent against 85.2 per cent a year ago.
The company also cut its unit costs per passenger, excluding fuel, by four per cent, which was less than hoped by analysts.