Transportation Industry

Company Watch - Norwegian Air

AirGuide Business, July 21, 2008

7/21/2008

Norwegian Air swings to loss. Expansion and fuel costs weighed heavy on Norwegian's bottom line in the second quarter as the LCC reported a NOK62.2 million ($12.3 million) loss that represented a reversal from a NOK44.7 million profit in the year-ago period. Looking ahead, it said third-quarter demand is "satisfactory" and it is "intensifying cost reductions as well as taking measures to increase revenues." A fuel surcharge introduced in May has covered 20%-25% of the increase in fuel costs, a ratio that should grow. It expects full-year unit cost of NOK0.55. 7/18/2008

Norwegian Air yesterday it unveiled a cooperation agreement with Copenhagen-based LCC Sterling Airlines that will feature reciprocal codesharing on CPH-Oslo Gardermoen and CPH-Stockholm Arlanda flights beginning Sept. 15. From the end of October the agreement will extend to six additional European destinations from OSL (operated mostly by Norwegian) and four from ARN (mostly by Sterling.) 7/18/2008

Norwegian Air's second-quarter revenue rose 52.3% year-over-year to NOK1.55 billion as passenger numbers climbed 50% to 4.3 million. EBIT swung to a NOK72.7 million loss from a NOK66.9 million profit in the year-ago period. The mainline flew 1.86 billion RPKs, up 33%, against a 34% rise in ASKs to 2.37 billion, driving load factor down 1 point to 78%. Norwegian.se flew 79% full with no year-ago comparison available. Mainline yield fell 7.4% to NOK0.63, unit revenue dropped 7.4% to NOK0.5 and unit cost rose 1.9% to NOK0.54. The company is entirely unhedged. 7/18/2008

Norwegian Air ended the quarter with 41 aircraft in operation compared to 24 one year earlier. It took delivery of six 737-800s, continued to integrate the former FlyNordic (now Norwegian.se) and settled into its new base at Oslo Rygge. 7/18/2008

Scandinavia's two biggest budget airlines, Norwegian Air Shuttle and Danish-based Sterling Airlines have signed a "strategic cooperation" agreement on a number of routes, Norwegian Air said on Thursday. The two low-cost rivals to Scandinavian airline SAS will cooperate on the Oslo-Copenhagen and Stockholm-Copenhagen routes from September 15. From the end of October the cooperation will be extended to a number of international destinations from Oslo and Stockholm. The deal still needs approval from competition authorities. 7/17/2008

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