Norwegian Air posts Q1 loss, flags fuel cost impact on recovery By Reuters
OSLO (Reuters) -Norwegian Air posted a loss for the first quarter on Friday and said the surge in fuel costs will partly offset the positive effects of increased bookings for the summer season.
The carrier said it is now ramping up its operations as countries across Europe have removed most COVID-19 restrictions.
Norwegian Air earlier this month said the number of passengers rose by 50% in April from the prior month and that ticket yields, an important indicator of profitability, increased by 21% in the same period.
“The increase in bookings ahead of the summer season is significant,” Chief Executive Officer Geir Karlsen said in a statement.
Pent-up demand for travel has also resulted in a higher willingness to pay for tickets, the company said, while cautioning that the cost of flying an aircraft was rising.
“The increase in fuel prices is expected to partly offset the company’s positive recovery,” Norwegian said.
The budget carrier, however, booked a net loss of 1 billion Norwegian crowns ($101.82 million) for the January-March period, which was dented by Omicron-fuelled lockdowns.
In the same quarter of 2021 the company’s loss stood at 1.2 billion crowns.
The company’s liquidity was less affected, however, with cash and cash equivalents declining by 160 million crowns in the quarter to 7.5 billion crowns at the end of March.
The pandemic in late 2020 sent indebted Norwegian into bankruptcy proceedings from which it emerged in a slimmed-down version almost a year ago, with no long-distance network, a smaller fleet and much less debt.
It has since gradually rebuilt its operations and expects to increase the number of aircraft in its fleet to 85 by mid-2023 from 51 at the end of 2021, which will still only be around half of the fleet it had at its pre-pandemic peak.
($1 = 9.8212 Norwegian crowns)