Tuesday, 7 January 2020

Is Norwegian bouncing back? The airline reports higher unit revenue, better on-time performance and lower CO2-emissions in 2019

Is Norwegian bouncing back?  The latest traffic figures for 2019 show that the company is delivering on its strategy of moving from growth to profitability. In recent months the airline has axed routes and cut capacity and so far these actions seem to be working.  In 2019, the capacity, in terms of seat kilometre, was 1 percent higher than the previous year; a little over the previously announced zero growth. 

Overall, the unit revenue increased by 7%, while the on-time performance was close to 80 % and the load factor was 86.6 %. Thanks to the airline’s young aircraft fleet, its large share of direct flights and high load factor, CO2-emissions were reduced with four percent to 69 grams CO2 per passenger.

More than 36 million passengers chose to travel with Norwegian in 2019. “Just a few days into my role as CEO of Norwegian, it’s a pleasure for me to present positive traffic figures. Throughout 2019, Norwegian’s dedicated employees have made an impressive effort delivering on the strategy of moving from growth to profitability,” said Norwegian’s CEO Jacob Schram.

“Throughout the year, the company has worked on reducing the capacity in line with demand and worked continuously to set a route structure adapted to the large seasonal fluctuations across the industry. At the same time, emissions are being reduced compared to previous years. The ticket sales for the next months ahead are looking good, both for business- and leisure travellers. I would like to welcome all new and loyal customers on board,” Schram continued.

Norwegian is a fun airline to fly, good service, comfortable aircraft at reasonable flights,  it is popular with passengers - mostly, but has many detractors in the industry.  One of those is Ryanair boss Michael O'Leary who never wastes an opportunity to slag off and attack the airline, its management and future prospects. In the past, the playground bully of the European aviation industry has predicted the end of the airline twice and called it a dog and yet, somehow Norwegian continues to survive in such a heavily contested marketplace and continues to operate.   The group sold off its Argentinian operation, which many saw as an inevitable conclusion to an ill-fated attempt to rock the boat in the South American low-cost airline market. JetSMART has taken on the operation which operated daily flights to eight destinations.    At the beginning of November last year, the firm announced it had secured more funding to fully cover the airline operation throughout 2020 and a little bit beyond.  It had also conducted other initiatives to reduce cost outlays, such as leasing rather than buying aircraft, restructuring future delivery and sold shares in its bank. With these and a few other efforts the airline is making to make the future profitable seem to be working, it really does look like that firm is bouncing back.  

Schram is new to the job and hasn't yet met all the staff, “I am now looking forward to getting to know the company and the employees better. In the coming weeks, my first priority will be Norwegian’s dedicated employees, as I will be visiting a number of Norwegian’s offices and bases,” 

Revenue growth in December
The last month of the year was also characterised by a significant increase in unit revenues and an improved load factor. The unit revenue increased with 21% and the load factor was 83.5 %, up by 4.9 percentage points. A total of 2,255,109 passengers chose to fly with Norwegian in December. The capacity was also reduced considerably in December, in line with what the company had previously communicated to the financial market.

The company operated 99.5 percent of the scheduled flights in December, 78.4 percent of which departed on time.

The company continued to reduce its CO2 emissions in November with 68 grams per passenger kilometre, a reduction of 11.3 percent compared to the same period last year. This is despite the grounding of the new MAX aircraft which has forced the company to wet lease older aircraft. With an average age of 3.8 years, Norwegian has one of the world’s most environmentally friendly fleets. Thanks to this, the company has reduced its per passenger emissions by 30 percent since 2008. The CO2 reductions would have been even bigger this month – and for the whole year – if Norwegian had included only its own aircraft in the emission calculations.

Recommended for you...

No comments: