Norwegian has reported a net loss of nearly 1.5 billion Norwegian krone (£131 million) in 2018, blaming fuel costs, engine problems and “tough competition”.

The news looks bad for the low-cost carrier, which has been introducing a series of cost-cutting measures to improve its results. The loss is a significant increase on the £27.4 million deficit recorded in 2017.

Although Norwegian saw total revenue grow 30 per cent to NOK 40 billion (more than £3.6 billion), the airline says its profits were hit by high fuel prices, costs related to issues with Rolls Royce engines on Dreamliner aircraft and “tough competition” in its markets.

Norwegian claims it has reached an agreement with the engine manufacturer, which it says will have a positive effect in 2019.

Last month, the airline sought a cash injection through a fully underwritten rights issue of £270 million.

The airline says its key priority moving forward is “returning to profitability through a series of measures”, including continuing its cost-cutting measures, “an optimised route portfolio” and the sale of aircraft.

Former shareholder International Airlines Group (IAG) has pulled out of offering further bids to buy Norwegian and will sell its 4 per cent share.

Norwegian CEO Bjorn Kjos says the airline will slow its growth in 2019 and make fewer investments after a period when the carrier added new aircraft and routes to its network.

Kjos commented: “We have taken a series of initiatives to improve profitability by reducing cost and increasing revenue going forward. We have optimised our base and route structure to streamline the operation as well as divested aircraft, postponed aircraft deliveries and not least started an internal cost reduction programme, which will boost our financials and bring us back to profitability.

“Going into 2019, we will enter a period of slower growth and fewer investments, while constantly looking for new and smarter ways to improve our efficiency and offer new products and services to attract new customers.”

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