– It’s not good enough, but it’s definitely moving in the right direction – E24
Norwegian makes money again and the arrows point upwards. However, the market is still only going for half a machine, the company warns.
The airline Norwegian is making money again and on Thursday was able to present a profit of around NOK 170 million before tax for the most important summer months of July, August and September.
However, it was anything but cheers and champagne corks when the group management appeared at Aker Brygge in the morning.
– It is not good enough, but it is definitely moving in the right direction, says CEO Geir Karlsen in Norwegian to E24.
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Half traffic
During today’s quarterly presentation, the Norwegian CEO pointed out that air traffic over Avinor’s airports is still only at around 55 percent of the level in 2019, before the corona pandemic.
Corresponding figures are also seen for Copenhagen Airport Kastrup, even though it opened up faster than in Norway, according to him.
– The market is still not back, and we are still affected by the pandemic, says Karlsen.
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Flows to
However, the summer months have started a positive trend. Already in June, a sharp increase in ticket bookings was seen, which has gradually increased.
At the same time, the number of members in the Norwegian Reward loyalty program increases by 6-8000 members a week, according to the Norwegian boss.
– Customers come back and book further and further ahead, says Karlsen.
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– Not satisfied
However, the Norwegian boss does not hide that he is still not satisfied.
– We are still not satisfied with the ticket orders and dividends (revenues per passenger kilometer, editor’s note), but it is going in the right direction, he says.
He has the same message called “other income” (supporting), as income from sales on board, luggage and other additional services.
In the third quarter, these accounted for 25 percent of ticket revenues.
– It is still a bit low in relation to passengers, but it is going right, says Karlsen.
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Winter peel
The summer months usually have to finance a much leaner winter season, with many of the airlines losing money.
Despite the fact that Norwegian well into 2022 has called “power of the hour” agreements for its aircraft, which you only pay for the time the aircraft are in the air, the company expects to lose money during the winter.
– Historically, November and February are often the worst months, while December and Christmas traffic will be better. But for the period as a whole, we want a “cash burn” (net cash consumption, editor’s note), but it is controllable, says Karlsen to E24.
– Very safe
The company also had no net cash consumption in October, and has roughly the same cash balance today as a month ago, according to him.
– We want a “cash burn”, but it will be relatively low, says Karlsen with reference to the winter season, during the presentation.
At the end of September, Norwegian’s cash balance was DKK 7.6 billion. The company’s net interest – bearing debt was NOK 642 million.
– We are very confident that we have a strong cash position when we now enter the low season, which is ahead of us, says Karlsen.
– Can pass SAS
Aircraft analyst Hans Jørgen Elnæs is encouraged by Norwegian’s quarterly report, and points to the company’s deliveries on a positive cash flow from operations, as promised, as well as profits before tax.
He also believes that Norwegian may overtake SAS in the number of passengers in October.
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– The prospect of good entry in bookings and an estimated occupancy rate in October of 80 percent loves well. It could also mean that Norwegian can overtake SAS in the number of passengers in October, says Elnæs.
Increases everywhere
In the third quarter, almost 2.5 million passengers traveled with Norwegian, compared with approximately one million in the same period last year.
Capacity (ASK) increased by 130 percent and passenger traffic (RPK) increased by 177 percent compared to the third quarter of 2020.
The fill rate was 73.1 percent, which is an increase of 12.5 percentage points.
Average route length increased by 20 percent. At the end of the third quarter, the company’s fleet consisted of 51 aircraft.
Norwegian announced on Wednesday that it had leased another 13 aircraft.
All must be delivered by the end of the first quarter to be ready for the company’s summer season.
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