Updates from Norwegian Air Shuttle ASA
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The first results of Norwegian Air Shuttle since it came out of bankruptcy protection showed that the low-cost airline is still struggling with the impact of the Covid-19 pandemic, even though it has improved its financial position.
Norwegian said it expects future bookings to continue to increase as travel restrictions in Europe are eased, but warns that uncertainty over Covid is still too high to offer profit guidance this year.
Under the preferred measure of earnings before interest, tax, depreciation, amortization and restructuring costs, excluding other gains and losses, Norwegian’s losses increased in the first half of 2020 from NOK 467 million to NOK 1.86 billion ($ 215 million). Revenue fell by 92 percent to NKr591 million.
But thanks to its financial restructuring, which he completed in May, it fell back from a loss of NOK 4.79 billion last year to a profit of NOK 1.59 billion in 2021.
CEO Geir Karlsen said that the results in the first half were a clear improvement in Norwegian’s financial situation, as the airline reduced its operating costs and debt, so that it could plan for the renewed confidence and focus for the future.
He added: ‘Advance bookings are still increasing in response to the easing of travel restrictions and the roll-out of international vaccination programs. We expect this trend to continue in the remaining months in 2021 and until 2022. ”
Norwegian has expanded itself too much ahead of the pandemic and significantly increased its debt to fund a loss-loss transatlantic long-distance program. He has now abandoned these flights and is trying to concentrate especially on the Nordic home area and flights from there to Europe.
The low-cost airline ends 2019 with a fleet of 156 aircraft, but only operated about 10 aircraft this spring. At the end of June, it had increased to 51 aircraft and Norwegian estimates that it would work around 70 next year if the recovery were to take place in air traffic.
Norwegian managed to reduce its debt by 96 per cent from a year earlier during its financial restructuring in Ireland and Norway, which ended in a major debt-for-share exchange leaving the creditors with most of the airline owned.
Norwegian now operates most of its aircraft by the hour, which means that it only pays for them if it uses them, so the cost should be much more in line with demand. Cash burns in June – the first full month since the restructuring – were significantly reduced from the level at the start of the pandemic.
Shares in Norwegian, which have fallen sharply and steadily over the past three years, were flat at NKr10 on Tuesday morning.