The global grounding of the Boeing 737 Max and troubles with Rolls Royce engines contributed to continued annual losses at Norwegian Air.
The low-cost carrier suffered a pre-tax loss of 1.6 billion Norwegian krone (£133m) in 2019 against NOK 2.5 billion (£208m) the previous year.
The results came despite an 8% rise in total revenue to NOK 43.5 billion (£3.6bn).
The airline described 2019 as a “challenging year for the industry marked by a tough trading environment”.
Comment: Can Norwegian Air fly on? [Aug 19]
Norwegian Air added: “Significant costs caused by the global grounding of the Boeing 737 Max and the ongoing Rolls Royce engine issues on the Dreamliner fleet meant the company was forced to wet lease additional aircraft to avoid cancellations and delays throughout the network.”
Norwegian had 18 Boeing 737 Max aircraft grounded during the year, resulting in additional costs of NOK 1 billion.
However, cost cutting of NOK 2.3 billion was achieved during the year through a #Focus2019 initiative.
The third largest carrier at Gatwick also postponed aircraft deliveries, sold its domestic operation in Argentina and disposed of shares in a Norwegian financial holding firm.
More than 36 million passengers were carried in the year as capacity growth was trimmed to 1% as part of a bid to switch from growth to profitability.
Unit revenue increased in nine consecutive months, driven by maturing routes and the optimisation of Norwegian’s global route network, the airline said.
Punctuality has improved “considerably” during the past six quarters, and in the fourth quarter 2019 it was up 3.1 percentage points to 82.6%.
Thanks to Norwegian’s young and more fuel-efficient fleet the airline reported that 1.7 million metric tons of CO2 were saved in 2019 compared to the industry average.
At the same time, 40% of total CO2 emissions were offset through the EU’s emissions trading system.
“Since its launch in December, 123,000 customers compensated their carbon footprint using the partnership between Norwegian and the climate-tech company CHOOOSE during the booking process,” the airline said.
Chief financial officer Geir Karlsen said: “2019 marked a new flight path for Norwegian as the company changed its strategy to move from growth to profitability.
“We have achieved our initial goal to save NOK 2.3 billion as part of #Focus2019 and concluded several positive financial milestones.
“The focus of returning to profitability will continue as we focus on Program NEXT to build a strong, sustainable and profitable business to benefit our customers, employees and shareholders.”
Chief executive Jacob Schram added: “Throughout 2020, we will turn challenges into opportunities as we remain committed to offering greater choice to customers, contributing to a sustainable aviation industry and refining our products and services.
“Norwegian has changed the landscape of low-cost travel and as a company we will continue to change and adapt to further attract both business and leisure customers.”
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