Low-cost carrier Norwegian said its January figures show the company “continues to deliver” on its strategy to become profitable, though it warned investors of a potential £83 million hit for 2019 from the grounding of the Boeing 737 Max aircraft.
The carrier currently has 18 of the troubled planes grounded following a Lion Air crash in October 2018 and another on an Ethiopian Airlines flight in March 2019. It has a further 16 deliveries that have been delayed until regulators certify the 737 Max to return to the skies.
As a result, Norwegian warned investors of an estimated negative impact on its PnL of 1 billion Norwegian Kroner on its 2019 figures. The airline is still in discussions with Boeing on compensation and a new delivery schedule.
Despite the impact of the 737 Max issue, the carrier said its load factor for January – usually a slower month for the airline industry – was up 4.8 percentage points to 81 per cent, while it achieved its highest on-time performance since 2015 at 87 per cent.
The company also hailed a reduction in CO2 emissions, reporting a 4 per cent drop to an average of 75g per passenger kilometre. Norwegian added this was achieved even with a higher share of older wet lease aircraft.
It claimed maintaining a younger fleet of aircraft with an average age of 4.6 years has helped it reduce its passenger emissions by 33 per cent since 2009.
Newly-appointed CEO Jacob Schram commented: “I am pleased that we continue to deliver on the strategy of moving from growth to profitability. For ten consecutive months, including January, the planned capacity reduction impacted the unit revenue and load factor positively. I am also pleased that our on-time performance continues to improve, as I know how important punctuality is for our customers.
“In the coming months, I look forward to working together with my dedicated colleagues on the ground and in the air to position Norwegian for a profitable and sustainable future in international aviation.”
Norwegian was due to launch flights from Heathrow to challenge legacy carriers after securing runway slots in a lottery, but it was revealed yesterday that the airline decided to hand the slots back to the airport due to “fleet pressures” caused by the 737 Max grounding and ongoing problems with Rolls Royce Trent engines used on its Dreamliners.
The carrier could see ancillary revenue increase following the announcement that it is now charging customers on the cheapest fares to place carry-on baggage in the overhead bins.