LONDON – Norwegian, based out of the Scandinavian area, has reported its first-quarter (Q1) financial results for 2022.
The Results…
To start off with, the carrier had unfortunately reported an operating loss (EBIT) of NOK 849 million. However, the company had managed to conserve a strong liquidity position at NOK 7.5 billion in cash and cash equivalents.
The carrier’s profit before tax (EBT) for Q1 had amounted to a loss of NOK 1.031 million, however, this is a slight increase compared to 2021’s Q1 EBT which stood at a loss of NOK 1.189 million.
Norwegian has said that the start of the year was hampered by the spread of the Omicron variant, however, between mid-February and March, the carrier began to see an increase in demand for travel and bookings.
To aid from their losses being in a worse position, Norwegian operates their aircraft through power-by-the-hour lease agreements, meaning that they can quickly adapt to capacity changes on various routes.
Norwegian also made some comments regarding the impact on their operations that the war between Russia and Ukraine that began back in February, stating that their international capital markets have seen increased volatility as well as oil prices spiking that had resulted in increased fuel costs for them.
Commenting on their results, Norwegian’s Chief Executive Officer, Geir Karlsen has said:
“This quarter demonstrated our ability to adapt to fluctuations in demand quickly and efficiently, and that we can protect our strong liquidity position through a challenging trading period.”
“We are now seeing a strong increase in bookings ahead of the summer season where we have an attractive offering with close to 280 routes on sale.”
“The increase in fuel price does not impact our bottom line, but we are seeing increased willingness to pay for air travel which partly offsets the increased cost-effectiveness.”
“Finally, I am pleased to see that our corporate travelers are again returning, a customer segment that places high value on Norwegian’s attractive route network and strong on-time performance record.”
In terms of their fleet position, Norwegian earlier this year had announced an agreement with the leasing giant AerCap, to lease 10 brand-new Boeing 737 MAX 8’s with deliveries due in the spring of 2023.
On top of this, Norwegian is also in the process of leasing an additional five more Boeing 737 MAX 8 aircraft to meet their 2023 requirements.
These new aircraft additions will bring their total fleet count to 85 for the summer 2023 season, up from the 70 they are expecting for the summer 2022 season.
At present, the carrier currently operates 67 aircraft, broken down into, three Boeing 737 MAX 8’s and 64 Boeing 737-800NGs (Next Generation).
In terms of passenger count, Norwegian saw 2.2 million passengers this quarter, which is up 0.2 million compared to Q1 2021. Their production (ASK) count was 3.9 billion, while their passenger traffic (RPK) was 3.0 billion.
Their load factor also saw an increase this year by 38.5% from Q1 2021’s figure to 76.9% in Q1 2022.
Their Year Ahead…
Norwegian is expecting a busy summer 2022 leisure travel season with travel restrictions being lifted across Europe and they are well-prepared for that demand increase.
Hopefully, with the fact that travel demand is increasing for the remainder of the year, Norwegian will begin to return to being profitable again, after a very difficult past few years with nearly ceasing all operations, its great to see that the company is in a much better position and hopefully continues to rise.
