Norwegian Air posts first-quarter loss, signals fuel cost impact on recovery

Norwegian Air posts first-quarter loss, signals fuel cost impact on recovery

“The increase in bookings ahead of the summer season is significant,” Chief Executive Officer Geir Karlsen said in a statement.

Norwegian Air posted a loss for the first quarter on Friday and said the surge in fuel costs will partly offset the beneficial outcomes of expanded bookings for the summer season. The transporter said it is presently increase its tasks as nations across Europe have eliminated most COVID-19 restrictions. Norwegian Air recently said the quantity of travelers rose by half in April from the earlier month and that ticket yields, a significant indicator of profitability, expanded by 21% in a similar period.

Pent-up demand for travel has also resulted in a higher willingness to pay for tickets, the company said, while cautioning that the cost of flying an aircraft was rising.

“The increase in fuel prices is expected to partly offset the company’s positive recovery,” Norwegian said.

The budget carrier, however, booked a net loss of 1 billion Norwegian crowns ($101.82 million) for the January-March period, which was dented by Omicron-fuelled lockdowns.

In the same quarter of 2021 the company’s loss stood at 1.2 billion crowns.

The company’s liquidity was less affected, however, with cash and cash equivalents declining by 160 million crowns in the quarter to 7.5 billion crowns at the end of March.

The pandemic in late 2020 sent indebted Norwegian into bankruptcy proceedings from which it emerged in a slimmed-down version almost a year ago, with no long-distance network, a smaller fleet and much less debt.

It has since gradually rebuilt its operations and expects to increase the number of aircraft in its fleet to 85 by mid-2023 from 51 at the end of 2021, which will still only be around half of the fleet it had at its pre-pandemic peak.

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