April 22, 2021

Norwegian multiplies its losses by five in 2018 to 150 million | Economy

Norwegian multiplies its losses by five in 2018 to 150 million | Economy

Norwegian Air Shuttle closed 2018 with losses of 150 million euros, multiplying by five the red numbers registered in 2017, Although its turnover increased by 30% in the last year, to 4,128 million euros.

The Nordic low cost airline attributes these poor results to the problems in the Rolls-Royce engines of the new Boeing 737 Dreamliners aircraft that forced him to lease planes with crews to avoid delays and cancellations in intercontinental flights, high fuel prices and "tough competition in a period of strong growth."

A total of 37.34 million passengers flew with Norwegian in 2018, 13% more, with an average occupancy rate of 85.8%. Spain stood as the third market of the company by income, with 26% of the total, only behind Norway and the United States.

The company, that was intended by IAG although it finally rejected making an OPA, says it has reached an agreement with the manufacturer of the Rolls-Royce engines, which will have a positive effect in 2019. During 2018, it received 25 new aircraft and closed the year with a fleet of 164 aircraft. "The operation of the Dreamliner is now running smoothly, and we do not anticipate that engine problems will affect our service in the future."

Cost reduction plan

The airline, which specializes in low-cost long-haul flights, said that starting in 2019, growth and investment will decrease considerably, and has undertaken a series of initiatives to return to profitability this year. The unit costs of the company (excluding fuel) were reduced by 12% in 2018.

In this line, Norwegian announced in January the closure of three of its eight Spanish bases (Palma de Mallorca, Gran Canaria and Tenerife) and those of Rome Fiumicino in Italy, and Stewart and Providence in the United States.

"We have optimized our structure of operational bases and routes to improve operations, as well as disinvest in airplanes and postpone aircraft deliveries; In addition, we have initiated an internal cost reduction program that will boost our finances and return us to profitability, "Norwegian founder and CEO Bjørn Kjos said in a note.


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