25 August, 2022

NOK 1,248 million pre-tax profit in the second quarter 2022 for Norwegian

Norwegian has reported a large re-tax profit for the second quarter of the year, despite some difficult trading conditions.  The budget airline said its profit was NOK 1,248 and carried some 5 million passengers. 

“This quarter has demonstrated our ability to rapidly ramp up capacity and effectively meet the strong demand for air travel. The results have been made possible thanks to our dedicated colleagues that put our customers at the heart of our operations. I am particularly pleased that we deliver market-leading regularity in times with capacity constraints across European airports and a technician strike in Norway,” said Geir Karlsen, CEO of Norwegian.

The summer program has been well received among customers across markets. Many customers have longed to travel to Norwegian’s key destinations, creating strong pent-up demand with increasing traffic and bookings through the quarter and into the busy summer season. Production (ASK) was close to double from the previous quarter, while the number of passengers increased with 124 percent. Load factor improved through the quarter to 85 percent in June and increased further into July.

This quarter, Norwegian announced a landmark deal with the purchase of 50 Boeing 737 MAX 8 aircraft, due to be delivered between 2025 and 2028. The delivery schedule closely corresponds to current aircraft lease expirations, entailing a limited net increase of the current fleet. The agreement also includes options for an additional 30 aircraft. Following the conclusion of the agreement, on 22 June, Norwegian reinstated a previously impaired pre-delivery payments (PDP) of NOK 2,099 million in the quarter.

“The aircraft deal with Boeing is key for Norwegian’s next chapter. It will enable us to serve our customers with modern fuel-efficient aircraft, significantly reducing our carbon footprint. In addition, it sets the stage for us to own a large share of our fleet, enabling us to solidify our Nordic stronghold,” said Karlsen.

In June, aircraft technicians went on strike after the Federation of Norwegian Aviation Industries (NHO Luftfart) and the Norwegian Aircraft Technician Organisation (NFO) failed to reach an agreement. Strong dedication and effort from the Norwegian organisation ensured that disruptions and cancellations were kept to a minimum. The strike was concluded after ten days on 28 June through forced arbitration.

In the second quarter of 2022, Norwegian had 5.0 million passengers, up from 0.4 million in the same period last year and 2.2 million passengers in the previous quarter. Production (ASK) was 7.6 billion, while passenger traffic (RPK) was 6.2 billion. The load factor increased to 81.2 percent, up from 57.4 percent in the same period last year and 76.9 percent in the previous quarter.

Punctuality was heavily impacted by capacity constraints at European airports this quarter. Share of flights departing on schedule was 78.8 percent, compared to 95.4 percent in the same period last year and 88.1 percent in the previous quarter. Regularity, share of flights taking place, was however 99.4 percent.

Looking ahead to a solid autumn and winter “Looking ahead, Norwegian is well positioned to solidify the position as a leading Nordic airline. Our customers assign high value on Norwegians offering, including the attractive route network, the award-winning Norwegian Reward loyalty programme, and market-leading operational performance. Agreements entered into with Widerรธe and Norse Atlantic Airways in July will serve to further increase the attractiveness of our offering,” said Geir Karlsen.

Current booking trends are encouraging with many customers booking their autumn holidays. For the upcoming winter, Norwegian will utilise the fleet flexibility made possible through power-by-the-hour agreements to optimise production to fluctuations in demand. For the current year, Norwegian is increasing its fleet to 70 aircraft. For the summer of 2023, 15 additional aircraft will be added, bringing the total fleet to 85 aircraft.

Air Models have a range of aircraft models, including some special 737 MAX models, including this one in the colours of flydubai.  

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