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Norwegian Air has come to an agreement with both Airbus and Boeing to reschedule the delivery of its aircraft to reduce its capital spending.
Norwegian has also reported its first quarter results. The quarter was characterised by reduced costs, increased revenue and significantly improved on-time performance. The net loss was NOK 1,489 million ($171.7 million), while the company’s unit cost excluding fuel decreased by 8 percent during the same period. The total revenue was NOK 8 billion, up 14 percent.
The airline continued;
Norwegian’s key priority is returning to profitability through a series of measures, including an extensive cost-reduction program, an optimized route portfolio and sale of aircraft. The company’s internal cost reduction program #Focus2019 has been implemented, achieved cost reductions were NOK 467 million this quarter. The company has also strengthened its balance sheet through a fully underwritten rights issue of NOK 3 billion, which secures a stronger financial position. The company is well positioned to continue to attract new customers, not least in the long-haul market, where the development is stronger than in the short-haul market.
For the first quarter, the total revenue was NOK 8 billion, an increase of 14 percent from the same period last year, primarily driven by intercontinental growth and increased traffic in the Nordics. More than 8 million passengers flew with Norwegian this quarter, a growth of 9 percent. The load factor was 81 percent. The company’s unit cost excluding fuel, decreased by 8 per cent compared to the first quarter in 2018. The punctuality increased significantly this quarter, from 73 to 81.3 percent. The regularity was unchanged at 98.7 percent.
“I’m pleased with the positive developments this quarter, despite the 737 MAX issues. We have taken a series of initiatives to improve profitability by reducing costs and increasing revenue. We are optimising our base structure and route network to streamline the operation as well as divesting aircraft, postponing aircraft deliveries and not least implementing our internal cost reduction program, which will boost our financials. I am also pleased that booking figures and overall demand for the coming months look promising,” said CEO of Norwegian, Bjørn Kjos.
Productive meetings with Boeing
In March, Norwegian temporarily suspended operation of 18 Boeing MAX 8 aircraft. The company combined flights and booked customers to other departures within Norwegian’s own network, consequently reducing the impact on passengers. The company will continue to limit passenger disruptions by also offering flights with wetlease companies whenever necessary. The number one goal is to operate its schedule according to plan.
“Our dedicated colleagues at Norwegian have been working day and night to find solutions for our customers. They will continue to do their utmost to ensure that all flights continue to depart as planned, regardless of how long the MAX stays out of service,” Kjos continued.
“We have had some productive meetings with Boeing where we have discussed how we can maneuver through the difficulties the MAX situation is causing Norwegian,” Kjos added.
Top Copyright Photo (all others by the airline): Norwegian Air Shuttle (Norwegian.com) (Norwegian Long Haul) Boeing 787-9 Dreamliner LN-LNR (msn 38784) (Freddie Mercury, British Rock Legend) AMS (Ton Jochems). Image: 946289.
Norwegian aircraft slide show:
Norwegian Air’s largest cabin crew union in France has called for a strike from April 24 to April 26, seeking higher pay and better working conditions, a union representative said on Saturday.
UNAC union representative Anastasia Durand told Reuters the union represents 70 percent of the airline’s 158 cabin crew based at Charles de Gaulle airport in Paris, also known as Roissy, from where Norwegian has four or five flights per day.
Durand said there had been no formal vote for the strike but the union had sounded out staff and there was general support for the action. She didn’t say if any talks were planned with the company.
Top Copyright Photo: Norwegian Air Shuttle (Norwegian.com) (Norwegian Long Haul) Boeing 787-9 Dreamliner LN-LNU (Babe Ruth, American Athlete) AMS (Ton Jochems). Image: 946250.
Norwegian aircraft slide show:
Norwegian has made this announcement:
In response to the instruction by the European aviation regulatory bodies to suspend operations of the Boeing 737 MAX, Norwegian will temporarily deploy a Boeing 787-9 Dreamliner to operate US flights from Dublin Airport to support affected customers.
Norwegian is continuing to minimise inconvenience caused by the temporary grounding of the Boeing 737 MAX by providing customers with SMS and web updates and care and assistance while re-routing passengers within its network.
Customers booked on affected transatlantic routes to and from Ireland serviced by the 737 MAX will be rebooked onto flights using the 787-9 Dreamliner. The 787 Dreamliner, registered G-CKWF with Charles Lindbergh on the aircraft tail, will operate the Dublin-New York Stewart (SWF) route daily.
The first flight will be operated today on flight D81763 from Dublin Airport to New York Stewart International Airport (SWF) at 15:20 local time. Arrangements are being made to accommodate passengers booked to travel from Dublin to Stewart and Providence on the new Dreamliner service with plans to bus passengers to Providence upon arrival in New York.
Norwegian will position the 787-9 Dreamliner aircraft and crew from London Gatwick to Dublin Airport this afternoon at 13:30 local time.
The Boeing 787-9 Dreamliner has 338 seats configured with a Premium cabin offering 56 seats and 282 seats in economy.
We would like to apologise to affected customers and we remain committed to ensuring that customers can continue to travel on Norwegian’s network.
Norwegian has issued this statement:
Following the decision by the relevant aviation regulatory bodies to temporarily suspend operations of Boeing 737 MAX, Norwegian will not operate any flights with this aircraft type until further notice. We remain in close dialogue with the aviation authorities and Boeing, and follow their instructions and recommendations.
Norwegian has more than 110 Boeing 737–800 aircraft in its fleet, which are not affected by this temporary suspension.
We would like to apologize to customers who will be affected by temporary cancellations and delays, but the safety and security of our customers and colleagues will never be compromised, and once authorities advise to cease operations we will of course comply.
Tomas Hesthammer, Norwegian’s acting Chief Operating Officer said:: “In response to the temporary suspension of Being 737 MAX operations by multiple aviation authorities we have taken the decision to not operate flights using this aircraft type, until advised otherwise by the relevant aviation authorities. We would like to apologize to customers for any inconvenienced caused, however, safety will always remain our top priority.”
Norwegian has 18 Boeing 737 MAX 8 in its fleet today. The total order of these aircraft is 110.
Norwegian followed-up with the additional statement:
Following the decision by the relevant aviation regulatory bodies to temporarily suspend operations of Boeing 737 MAX, Norwegian will not operate any flights with this aircraft type until further notice.
All aircraft that are currently airborne will continue to destination or return to home base. We are now working on re-allocating our fleet options with other aircraft types, re-bookings to other flights and combining flights to minimise inconvenience caused for our passengers. We would like to apologise to customers who are affected, but the safety and security of our customers and colleagues will never be compromised. Affected passengers will be informed via SMS and our web pages.
Top Copyright Photo: Norwegian.com (Norwegian Air International) (Ireland) Boeing 737-8 MAX 8 EI-FYI (msn 42834) (Arthur Collins, American radio communications pioneer) LGW (Antony J. Best). Image: 943737.
Norwegian (Ireland) aircraft slide show:
Norwegian will introduce new nonstop service from New York to Athens and Chicago to Barcelona for the 2019 summer season.
Service from Chicago’s O’Hare International Airport to Barcelona-El Prat Airport begins June 7, 2019; and service from John F. Kennedy International Airport to Athens International Airport begins July 2, 2019. Both new routes will be summer seasonal until October 26, 2019.
These new routes will be operated by Boeing 787 Dreamliners.
Norwegian Air Shuttle today released this statement:
Norwegian today reported its full year and fourth quarter 2018 results, figures strongly affected by engine issues, fuel hedge losses and tough competition in a period of strong growth. The net loss was NOK 1.454 million ($169.3 million) in 2018, while the company’s unit costs, excluding fuel, have decreased by 12 percent during the same period.
The key priority going forward is returning to profitability through a series of measures, including an extensive cost reduction program, an optimized route portfolio and sale of aircraft. The company is also strengthening its balance sheet through a fully underwritten rights issue of NOK 3 billion in order to increase its financial position.
The company was hit by several unforeseen challenges during 2018. Continued tough competition and high jet fuel prices affected the results, in addition to significant costs related to Rolls Royce engine issues on the Dreamliners. Norwegian was forced to wetlease aircraft to avoid delays and cancellations on intercontinental flights. Norwegian has now reached an agreement with the engine manufacturer, which will have a positive effect in 2019. The Dreamliner operation is now running smoothly, and we don’t foresee that engine issues will affect our service going forward. Going into 2019, Norwegian’s growth and investments will decrease considerably, and a series of initiatives have been undertaken to return to profitability this year.
The company’s total revenue was more than NOK 40 billion, an increase of 30 percent compared to 2017. A total of 25 brand new aircraft entered the fleet, contributing to a production growth (ASK) of 37 percent. The load factor was 85.8 percent and more than 37 million passengers chose to travel with Norwegian, an increase of 13 percent compared to the previous year.
Fourth quarter results
For the fourth quarter, the total revenue was NOK 9.7 billion, an increase of 23 percent from the same period last year, primarily driven by international growth as well as increased traffic in the Nordics. More than nine million passengers flew with Norwegian this quarter, a growth of 12 percent. The load factor was 80.9 percent. The company incurred losses of NOK 1.8 billion on its current hedge positions in Q4. Some of the loss has since reversed due to the latest increase in the jet fuel price.The company’s unit costs, excluding fuel, decreased by 14 percent compared to the fourth quarter in 2017.
“We have taken a series of initiatives to improve profitability by reducing cost and increasing revenue going forward. We have optimised our base and route structure to streamline the operation as well as divested aircraft, postponed aircraft deliveries and not least started an internal cost reduction program, which will boost our financials and bring us back to profitability,” said CEO of Norwegian Bjørn Kjos.
“Going into 2019, we will enter a period of slower growth and fewer investments, while constantly looking for new and smarter ways to improve our efficiency and offer new products and services to attract new customers,” Kjos added.
Norwegian in the UK and Ireland:
Top Copyright Photo (all others by the airline): Norwegian.com (Norwegian Air UK) Boeing 787-9 Dreamliner G-CKWC (msn 38893) (Robert Burns, Scottish Poet) JFK (Fred Freketic). Image: 945600.
Norwegian UK aircraft slide show: