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Norwegian Reports July Passenger Figures

 
  
 
 

Norwegian Reports July Passenger Figures

 
August 09
13:002018

LONDON — Norwegian has released this week its passenger numbers for the month of July 2018. The carrier has reported a new record for the month of July carrying 3.8 million passengers in a single month, which is a 13% increase compared to the same period last year.

READ MORE: Norwegian Releases 2019 Summer Schedule, New Flight To Toronto

Load factors were recorded at a healthy 93% with the official passenger number being 3,796,283. The total traffic growth for the carrier has risen by 33%, driven by a 35% increase in capacity growth for the carrier.

Norwegian operated 99.2% of scheduled flights but will be wanting to improve their on-time status with 67.9% of them only being on-time.

The carrier blamed the on-time performance this month to the air traffic control strikes across Europe, which has affected other carriers such as Ryanair, who have been very vocal about the strikes.

CEO of Norwegian, Bjørn Kjos, shared: “We are very pleased that an increasing number of passengers in Europe, USA, South America, The Middle East and Asia choose Norwegian for their travels. It is also satisfactory that even with a strong capacity growth our load factor is high.

READ MORE: Norwegian To Fly Gatwick-Tampa; New Winter Additions (+List)

“Our capacity growth is still high, but it is not increasing as rapidly as in previous months, which is in line with our strategy. We have been through a long period of strong growth and going forward we will reap what we have sown for the benefit of our customers, staff, and shareholders,” he concluded.

Other achievements of significance for the airline was that July saw them being named the World’s Best Low-Cost Long Haul Airline for the fourth consecutive year and Europe’s Best Low-Cost Airline for the sixth year running by Skytrax.

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Brazil Opens Low-Cost Market Authorizing Norwegian to Operate

August 13, 2018 Pablo Diaz News

Norwegian-B789-LAS-William-Derrickson-67 A Norwegian 787-9 in Las Vegas (Photo: AirlineGeeks | William Derrickson)
 

In December 2016, Brazil’s national aviation authority, ANAC, issued the famous “resolution 400,” which was an attempt to align the Brazilian aviation rules to the international standards. Among other changes, the most noticeable is the baggage allowance that permitted companies to create fare categories that do not include checked baggage, paving the way for low-cost carriers to access the market.

After a longstanding battle, the ruling was effectively imposed in mid-2017, and the market slowly adjusted to the changes. Last week, after months of intense negotiations, ANAC finally authorized Norwegian to operate long haul low-cost flights between London (Gatwick) and Rio de Janeiro or Sao Paulo.

This request follows the one Flybondi filed for a Buenos Aires (Argentina) and Sao Paulo, and the ongoing authorization request of Avianca Argentina, which attempts to coordinate operations with Avianca Brazil as they are part of the same holding, Synergy group.

With this approval, Norwegian obtains the capability to request specific routes and schedules, along with the offering of its tickets. No indication of a suggested price has come out yet, but the expectation circles around the 900 U.S. dollars round-trip that Argentinian branch is offering in a no-frills base.

Argentina’s case proves that long haul low-cost is a valid strategy: both LEVEL, IAG’s company, and Norwegian have increased their initial frequencies to cover the additional demand. While LEVEL is already operating 5 flights a week after a soft start with two, and is expanding the operation to nine weekly flights starting in next October,  Norwegian plans to fly a daily service to Gatwick by the end of the year.

Norwegian’s aircraft of choice is the Boeing 787-9 Dreamliner, with 56 Premium Economy seats and 282 Economy, although there is a different configuration available in the carrier’s fleet with less premium economy rows (five instead of eight) which brings its total capacity to 344 (35 and 309). Also, inflight entertainment is provided, but no onboard Wi-Fi.

 

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Norwegian Air International blames one-off costs as loss doubles

  • 20 August, 2018
  • SOURCE: Flight Dashboard
  • BY: David Kaminski-Morrow
  • London

Budget carrier Norwegian’s Irish subsidiary, Norwegian Air International, is attributing to non-recurring costs a full-year operating loss of more than $456 million.

At the end of 2017 the company held the commercial results for 12 Boeing 787-8s leased from Norwegian for transatlantic routes, and operated 70 Boeing 737s – comprising 64 737-800s and six 737 Max 8s.

Norwegian Air International’s operating loss almost doubled from the previous figure of $234 million, according to its latest financial statement for the year ending 31 December 2017.

 

It lists a pre-tax loss of almost $446 million and a net loss of $390 million.

Revenues for the airline increased by one-third, to just over $2 billion – including ticket and ancillary income of $1.95 billion – while expenditure rose by 41% to $2.48 billion, including a 61% hike in fuel costs to $535 million.

“The majority of the loss was as a result of start-up costs relating to new bases which the company does not expect to incur in the future,” says Norwegian Air International.

“It is envisaged that the company will become profitable in future years.”

It stresses that its parent, Norwegian Air Shuttle, has undertaken to provide financial support enabling Norwegian Air International to pay its debts for at least a year.

As part of this support over 2017 the subsidiary issued 675 million shares to Norwegian Air Shuttle, taking Norwegian Air International’s overall issued share capital to more than 1 billion shares.

Norwegian Air International established a Danish branch last year, it says, and completed the set-up of an Italian branch

 

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  • 3 weeks later...

All is not rosy in the "Low Cost" world.

Norwegian maintains plan to sell most of its A320neos on order

Sep 6, 2018 Jens Flottau | ATWOnline

Norwegian intends to stick to its strategy to sell up to 140 aircraft, the airline wrote in an investor presentation Sept. 4, confirming plans for large-scale asset disposals.

The LCC hopes to “disclose news about the transaction” before the end of the year, CFO Geir Karlsen told investors, referring to efforts to hand on most of its big order for Airbus A320neo family aircraft to another customer.

According to Airbus, Norwegian has firm orders for 65 A320neos and 30 A321neos (the LR variant capable of transatlantic range flying). “The Airbus A320neos are for all practical purposes for sale,” Karlsen said. The fate of the larger variant is not as clear as the airline may choose to keep some of them for Norwegian Air Argentina. The airline has also started selling of some of its older Boeing 737-800s, six of which are to leave the fleet this year.

Norwegian plans to operate 164 aircraft by the end of this year, 20 more than at the end of 2017.

The airline has reported a poor financial performance for some time as it continues to expand fast, in particular on its long-haul routes.In the first half of its financial year, the airline posted a NOK2.07 billion ($246 million) operating loss, although it made a small net profit as a result of exceptional items. Norwegian bolstered finances through a capital increase earlier this year but is seeking more ways to stabilize its financial position further. International Airlines Group (IAG) bought a 4.6% stake in Norwegian earlier this year with a view toward a potential full takeover, but talks failed in May and IAG indicated it may sell the shares again. Norwegian said at the time it has received other approaches, too. Among them was Lufthansa, which confirmed that it was “in discussions” with Norwegian.

If Norwegian does not find a buyer quickly, which is looking increasingly unlikely, it must make sure its financials are secure without the help of a new investor.

But deliveries of the aircraft on order may force Norwegian into a major capital expenditure should the orders be retained. Norwegian expects it must finance $1.75 billion in 2018 for aircraft purchases and pre-delivery payments (PDP), a figure that could rise to $2.2 billion next year.

In addition to the Airbus order, Norwegian also bought 110 Boeing 737 MAXs, eight of which have been delivered to date.

Transferring an order to a customer is complicated as typically the manufacturer and financiers have to agree. One industry source said Norwegian is unlikely to be able to hand over the order in one piece and would be more likely to find interested parties for smaller tranches. However, that process would likely take more time.

Separately, the airline has started selling tickets for the first flights of its Argentinian affiliate, which is scheduled to launch operations Oct. 16. Success of the Argentinian carrier is key to the future of the A321LRs, the first of which are due to arrive in 2019. Originally, they were to be used on transatlantic services from Europe, but these plans appear to have been dropped in favor of either disposal or a partial move to South America.

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49 minutes ago, J.O. said:

There are just too many negatives surrounding this outfit. I think I'd be booking elsewhere.

I feel the same way about all "Ultra Low Cost and indeed most Low Cost" airlines
 

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  • 1 month later...
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‎October ‎29, ‎2018, ‏‎39 minutes ago

 

LCC Norwegian takes off from Montreal, gets ready for Dublin ex YHM

 
‎Today, ‎October ‎29, ‎2018, ‏‎40 minutes ago | Peter Muir
LCC Norwegian takes off from Montreal, gets ready for Dublin ex YHM
 
Monday, October 29, 2018 Posted by Travelweek Group
 

MONTREAL — Norwegian’s first flight out of Canada takes off today, from Montréal to Guadeloupe, to be followed a few days later with Montréal to Martinique.

The low-cost carrier’s Canadian routes so far include:

  • Montréal to Guadeloupe starting Oct. 29. Three times a week service (Mondays, Wednesdays and Fridays) until end of March 2019 (winter season only)
  • Montréal to Martinique starting Oct. 31. Three times a week service (Tuesdays, Thursdays and Saturdays) until end of March 2019 (winter season only).
  • Seasonal winter service from Guadeloupe and Martinique to Cayenne, French Guiana, which will allow for connections to Montréal flights. Service will commence end of October 2018.

Next spring Norwegian plans to launch daily service from Hamilton/Toronto to Dublin, with onward connections to Scandinavia and Finland. Service starts March 31, 2019.

Norwegian announced in June 2018 that it was coming into the Canadian market, after much speculation.

The low-cost carrier has been on an aggressive expansion track. After launching long-haul flights in 2013 Norwegian has more than 500 routes servicing a network of 150+ destinations, with long-hauls operated through fully-owned subsidiaries.

The uptick in LCC travel has coincided with the decision by legacy carriers to develop low-cost subsidiaries of their own, and add basic economy fares to their mainline service.

Norwegian recently indicated that its rapid rate of expansion will slow down. Norwegian’s net profit for Q3 was up 18% compared to Q3 2017, with 11 million passengers for the quarter and a load factor at 90.5%.

The airline’s CEO Bjorn Kjos said that going forward “the growth will slow down, and we will begin to reap the large investments we have made over the years … however there is no doubt that tough competition, high oil prices and a strong dollar will affect the entire aviation industry, making it even more important to further streamline our operations and continue to reduce costs.”

High operating costs are partly to blame for the failure of two low-cost carriers in recent weeks. LCC Primera, which offered transatlantic flights out of Toronto and was about to start service out of Montreal, abruptly halted flights on Oct. 2. Meanwhile Cobalt Air, a Cypriot airline in business for two years, shut down operations on Oct. 17.

Like just about every LCC and ULCC Norwegian Air doesn’t pay commission but COO Thomas Ramdahl has said the carrier is looking at setting up volume-based incentives for the trade. Norwegian’s travel agent portal is https://agent.norwegian.com.

“Agents are important to us,” says Ramdahl. “Especially coming into new markets, agents are really important.”

 

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  • 2 months later...

Seems that life for and with the Low Costs is getting more difficult.  First Ryanair announced expected lower profits and now

Norwegian Air seeks cash injection

 

Norwegian Air wants to raise 3bn Norwegian kroner (£268m) through a rights issue to improve its finances.

The news comes as the company announced that its preliminary earnings for 2018 showed an operating loss of roughly 3.8bn kroner.

The budget carrier said it was not in talks with any potential buyers after British Airways owner IAG abandoned its plans to buy it last week.

In early trading on Tuesday, the company's shares plunged by 16%.

Billionaire John Fredriksen and the airline's chief executive Bjorn Kjos and chairman Bjorn Kise have all agreed to underwrite the issue.

 

Mr Kjos explained that the airline was going to change its strategic focus from growth to making cost savings.

"We will now get in place a strengthened balance sheet that supports the further development of the company," he said.

In a statement, the airline added that this would "increase its competitiveness and stand-alone financial strength".

The carrier confirmed that flights were unaffected by the news.

A rights issue happens when existing shareholders of a company are offered the chance to buy new shares at a special price.Presentational grey line

Analysis

Theo Leggett, business correspondent

Norwegian is in a race against time. The company is nothing if not ambitious - and it has certainly made an impact in Europe's cut-throat aviation market. But it needs to become consistently profitable, before the money runs out.

Norwegian's chief executive, Bjorn Kjos, has overseen a major expansion of the airline over the past five years, doubling the size of its fleet and expanding its route network dramatically. But his biggest gambit has been a major play into the low-cost long-haul market.

Cheap transatlantic travel is not a new idea: Freddie Laker tried it in the 1970s.

But it was only with the development of highly fuel-efficient aircraft like the Boeing 787 Dreamliner - which Norwegian is using - and the Airbus A350 that the idea really took off.

Now others are following Norwegian's example.

But all of this has come at a price. Norwegian has debts of $3.5bn and expects to rack up a sizeable loss for 2018.

Problems with engines on its shiny new Dreamliners clearly haven't helped either.

Small wonder Mr Kjos now says the carrier will focus on cost-cutting and profitability, rather than growth. His airline has shaken up the market - now it needs to show it can consistently make money from it as well.

Presentational grey line

Last year, Norwegian Air launched the first-ever budget flight from London to South America

Fares on the 14-hour trip to Buenos Aires started from £259 one-way.

The company started as a small regional airline flying between Bergen and Trondheim in 1993.

Mr Kjos turned it into Scandinavia's largest airline and the third-biggest budget carrier in Europe.

Norwegian's price strategy has been based on flying a young fleet of aircraft such as Boeing's 787 Dreamliner, which burn less fuel per passenger compared with other long-haul aircraft.

These offer passengers a more upmarket experience than they may have come to expect from a budget airline, with modern interiors and the benefit of free wi-fi on all routes in the future.

It flies from Gatwick, Manchester and Edinburgh airports to more than 150 destinations across Europe and worldwide including Boston, Dubai and San Francisco.

But in the second quarter of last year, the Civil Aviation Authority's most recent data, Norwegian was the airline with the second highest number of complaints from UK passengers, of those still in business.

It received 526 complaints per million travellers carried in that three-month period to June 2018, behind Tui Airways with 663, but ahead of TAP Portugal, with 430, and Ryanair, with 319.

Small Planet Airlines, which had its licence suspended by the CAA in November after filing for insolvency the previous month, had received 27,998 complaints per million customers in the same period.

Budget airlines have had differing fortunes in recent months.

In November, EasyJet announced a 41% rise in pre-tax profits to £578m for the year to 30 September.

And earlier this month, it said that it expected its full-year profits to meet City forecasts.

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Norwegian open to 'consolidation' talks after IAG exit

  • 29 January, 2019
  • SOURCE: Flight Dashboard
  • BY: Oliver Clark
  • London

Norwegian remains willing to "engage in consolidation discussions" after IAG's recent confirmation it will not bid again for the carrier, but says no such talks are currently ongoing.

The low-cost carrier says that while a planned NKr1.3 billion ($353 million) share issue will increase its "competitiveness and stand-alone financial strength, its board remains open to discussion that can "develop shareholder value in Norwegian".

Earlier this month IAG confirmed that it planned to sell its 3.93% stake in Norwegian, bought in support of two takeover offers made last spring, and that it would not be seeking to make a third bid for the carrier.

Following IAG’s acquisition of what was then a 4.6% stake in the airline in April 2018, Norwegian said it received approaches from "several parties" who expressed an interest for "structural transactions", financing the carrier and in various forms of "operational and financial cooperation",

It says discussions with such parties have been ongoing on "several levels and with different approaches".

Norwegian says that due to issues including "severe delays" in aircraft and engine deliveries experienced last year, it has for some time been assessing its financing needs and financing alternatives, including raising equity.

As a result, it secured "stand-by" underwriting commitment for a NKr3 billion rights issue during the fourth quarter of 2018. However, during that period and through December 2018, Norwegian says it was not in a position to raise equity while being engaged in "new, concrete and specific" negotiations related to the acquisition of the shares of the company. No such discussions are currently ongoing, it adds.

The carrier now intends to issue new shares next month and has called an extraordinary general meeting to put this to shareholders.

The airline, which will post an operating loss in 2018, has also announced plans to defer and divest aircraft as it aims to reduce capital expenditure and cut costs as part of a strategic switch in focus "from growth to profitability"

Shares in Norwegian fell around again today in morning trading, having previously dropped sharply on 24 January after IAG formally confirmed it would not be rebidding.

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