Norwegian Air Shuttle posted a second-quarter profit on Thursday after a loss in the first three months of 2022, as pandemic-related travel curbs eased and an earlier impairment charge was reversed, but it flagged a hit from high fuel costs.

The budget carrier reported a net profit of 1.25 billion crowns (€129.9 million) for the April-June period, against a loss of 1.0 billion crowns from January to March.

“This quarter has demonstrated our ability to rapidly ramp up capacity and effectively meet the strong demand for air travel,” chief executive Geir Karlsen said in a statement.

Current booking trends are also encouraging, with many customers booking holidays for the upcoming autumn season, the company added.

The airline reported a loss before interest, tax, depreciation, amortisation and rent (ebitdar) of 214 million crowns, an improvement from the 468 million loss in the first quarter.

A reversal of a previous impairment charge of 2.1 billion crowns, triggered by the resolution in May to a long-standing conflict with aircraft maker Boeing, lifted the net result to a profit, Norwegian said.

Soaring energy costs will, however, affect earnings for the year, with jet fuel representing 46 per cent of Norwegian’s operating expenses in the second quarter, up from 27 per cent in the first quarter.

“High fuel prices (are) expected to have a partly negative impact on the company’s results for 2022,” the airline said in a statement, adding that some of this was offset by rising fares.

Earlier this month, Norwegian Air said the number of passengers rose by 14 per cent in July from June and that ticket yields, the average fare per kilometre and an important profitability indicator, was 0.86 crowns in July, compared with 0.67 crowns in June.

The airline in mid-2021 exited a reconstruction process and emerged in a slimmed-down version with no long-distance network, a smaller fleet and far less debt. — Reuters

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