Omicron and Ukraine war blamed for Norwegian Air first quarter loss

Norwegian Air sought to limit losses as the seasonally weakest quarter of the year was also affected by the omicron virus and war in Ukraine.

The budget carrier reported an operating loss of NOK 849 million (£70 million) in the three months to the end of March.

A pre-tax loss of NOK 1.031 billion was reduced from NOK 1.189 billion in the same quarter last year but came against a profit of NOK 117 million (£10 million) in the previous three months.

The carrier, which operated a fleet of 58 aircraft, said continued cost control and “liquidity discipline” led it to conserve cash during the traditionally weak winter period, with a cash position of NOK 7.5 billion.

Passenger numbers grew to 2.2 million from 200,000 in the same period last year with an improved load factor of 76.9%.

The airline said: “The spread of omicron virus and government-imposed travel restrictions had a softening effect on air travel in December of 2021 that continued into January and February this year.

“Restrictions in the Nordics and at key European destinations were alleviated from mid-February and onwards, prompting a marked increase in travel and bookings.”

The use of flexible fleet arrangements agreements enabled Norwegian to “quickly adapt capacity to changes in demand, minimising losses through an already challenging winter trading period.”

Looking ahead, the airline said it was well positioned to respond to increasing passenger traffic and strong pent-up demand ahead of a busy summer 2022 leisure season.

Norwegian added: “Travel restrictions have been lifted across the Nordics and all key European destinations, and our customers now have a wide selection of European travel destinations to choose from.

“Booking trends currently show that customers are planning and booking travel earlier, and that there is higher willingness to pay for air travel across Norwegian’s network.”

Chief executive Geir Karlsen said: “We have adapted to fluctuations in demand quickly and efficiently, and we have managed to protect our strong liquidity position even through a challenging period.

“The increase in bookings ahead of the summer season is significant, and we look forward to welcoming our customers on board the close to 280 routes we have for sale.

“I am pleased to note that our corporate travellers are starting to return to air travel. We know they place high value on our attractive route network and strong on-time performance record.”

The airline agreed a deal in February to lease ten new fuel- efficient Boeing 737 Max 8 aircraft with delivery in the spring of 2023. Norwegian is in the process of leasing five more 737 Max 8 aircraft to meet 2023 requirements. This will bring the fleet to 85 aircraft for summer 2023, up from 70 aircraft this summer.

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