Thursday, October 26, 2017

Norwegian posts improved profits as Argentina OKs route requests

LCC Norwegian has reported a 2017 third-quarter net profit of just over NOK1 billion ($122 million, up 4% year-over-year (YOY), on strong international passenger growth and increasingly high load factors.

The LCC achieved the result on revenues that jumped 21% YOY, to fractionally over NOK10 billion, compared to NOK8.3 billion a year ago.

Passenger numbers were up 14% YOY at 9.8 million, with figures from Spain and the US showing particularly large improvements. The US figures, up 79% on a year ago, were the result of the increasingly large number of transatlantic routes the carrier has instituted in recent months.

During the quarter, Norwegian launched 14 new intercontinental routes, including Denver and Seattle.

Load factor was slightly up at 91.7%, compared to the year-ago figure of 91.3%. Capacity growth (ASK) was up 25% at 20.7 billion, while RPK kept pace, up 26% at just under 19 billion.

“An increasing number of passengers in the US, Spain and other parts of the world considerably contribute to the growth, which proves that our global strategy is being realized,” Norwegian CEO Bjørn Kjos said.

“However, we have had major additional costs related to wet leasing and compensation paid to passengers affected by delays, significantly affecting the quarterly result. But looking ahead, the ticket sales are satisfactory both on established and new routes.”

Meanwhile, on Oct. 25 the Argentine National Civil Aviation Administration granted the company’s South American subsidiary Norwegian Air Argentina concessions to operate 153 routes from Argentina, approving all but three of the routes the company had requested.

The Norwegian Group established its Argentinian subsidiary in January 2017. Norwegian plans to have a considerable operation in Argentina, including both domestic and international flights. It has said that the relative lack of competition on many South American sectors makes them ideal targets for its low-cost services.

(Alan Dron- ATWOnline News)

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