Transport

Norwegian Air hits revenue high as buyers circle

Low-cost carrier says sales rose 32% in second quarter

Photograph: iStock

Thu Jul 12 2018 - 08:17

Norwegian Air Shuttle posted an all-time high in revenue and an unexpected profit, helped by financial income, as potential buyers circle the low-cost carrier.

The company said sales rose 32 per cent to 10.2 billion kroner (€1.1 billion)in the second quarter from a year earlier, while net income was 296 million kroner, compared with a loss the year earlier, according to a report. Analysts had predicted a loss of 468 million kroner in the period.

"Despite being at the peak of our growth phase, we have been able to present a profit and decreased unit costs during the second quarter," chief executive Bjorn Kjos said in a statement. "Going forward, the growth will slow down and we will reap what we have sown for the benefit of our customers, staff and shareholders."

The airline carried 10 million passengers during the second quarter, representing a rise of 16 per cent, with a load factor of 86.8 per cent.

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Norwegian Air added transatlantic flights from Belfast, Dublin, Cork and Shannon to the US East coast i n 2017.

The company has attracted takeover interest from multiple potential bidders but made no mention of the interest in the report. While British Airways owner IAG has had two offers rejected and Deutsche Lufthansa is looking at submitting a proposal, Mr Kjos said in an interview last month that "several others" are also interested.

The company said that its expected production growth of ASK for 2018 is unchanged at 40 per cent. Due to the higher than expected fuel price, the company said it expects the unit cost including depreciation for the full year 2018 to be in the range of 0.425 to 0.430 kroner, up from previous guidance of 0.415 to 0.42 kroner. Capital spending this year was lowered to $1.75 billion from $1.9 billion and to $2.2 billion from $2.6 billion in 2019. – Bloomberg

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