Scandinavian low-cost carrier, Norwegian has just released its third-quarter results, showing strong growth in key markets and a year-on-year improvement in revenue. The airline’s chief executive, Bjørn Kjos said he was “pleased” with the results which proved Norwegian’s strategy as a low-cost long-haul airline was “being realised.”
Much of the growth has been made in two key markets – the USA and Spain with passenger traffic to and from the U.S. growing by 70%. Passenger traffic in Spain grew by 25%.
In September, Norwegian was finally granted a foreign air carrier permit from the U.S. Department of Transport (DOT) for its British subsidiary, Norwegian UK. Created back in 2015, the subsidiary was established to access Open Skies agreements. Norwegian says the permit will allow it to “establish a seamless operation and more effectively utilize its long-haul fleet.”
Norwegian had faced a tough approval campaign with traditional U.S. carriers petitioning the DOT to deny the airline’s application. At the time, Kjos said the decision would lead to the creation of thousands of new jobs in the U.S. Norwegian already employs more than 600 pilots and flight attendants in North America.
Across the airline’s worldwide network, Norwegian has reported a healthy passenger load factor of 91.7% although the airline doesn’t break this down by route or country. Along with Norwegian’s numerous new route launches, capacity has unsurprisingly grown by 25% in the quarter.
This has been helped by the addition of 10 new aircraft joining Norwegian’s fleet in the same period. They include four Boeing 737MAX aircraft which are being utilised on the carrier’s new transatlantic services between second tier, previously underserved airports. Five Boeing 787 Dreamliner’s joined Norwegian’s long-haul operation and one additional 737-800 entered the short haul fleet.
Norwegian claims these brand new aircraft will result in a 2% cut in emissions per passenger.
“I am pleased with the passenger growth and high load factor this quarter. During our 15 years in the skies, almost 210 million passengers have chosen Norwegian,” explained Kjos.
A word of warning…
But as Norwegian attempts to fend off criticism that the carrier is struggling financially, Kjos did note some caution, saying:
“We have had major additional costs related to wet-leasing and compensation paid to passengers affected by delays, significantly affecting the quarterly result.“
It’s an issue the airline has been grappling with for some time, with its aggressive expansion plans leading to aircraft shortages. In an attempt to fill those gaps, Norwegian has previously turned to expensive wet-lease arrangements to fly Norwegian routes.
During the quarter, Norwegian reported revenue of over $1.2 billion USD. The airline says its cash position is strong with $697 million USD available to it at the end of the reporting period.