The company reports a third quarter pre-tax profit of 604 MNOK ($102.6m). This result was significantly affected by additional operating costs associated with wet-leasing replacement aircraft (A340) on long-haul routes. In addition summer bookings were lower this quarter due to the unusually warm weather in the Nordics.
“In this quarter, we clearly see the outline of the company’s growth strategy. We have a strong passenger growth in all markets and we have managed to maintain a high load factor. At the same time, our results this quarter are significantly affected by the additional costs associated with replacement aircraft for the Dreamliner. In addition, Northern European sun seekers chose to enjoy the warm summer at home instead of flying south,” said CEO Bjørn Kjos.
- The third quarter was characterized by a solid production growth (ASK) with an increase of 31%.
- Around 6 million passengers chose to travel with Norwegian during the third quarter, an increase of 800,000 passengers (16%) compared to the same period last year.
- The growth is pervasive across all markets; the base at London Gatwick Airport had the highest increase in number of passengers. Norwegian accounts for 90% of the growth at Gatwick. (No surprise it wants to start US service from there)
- Load factor was 81%, down one percentage point compared to the same quarter last year. Norwegian long-haul routes have a load factor of more than 90%.
- The costs associated with wet-leasing a replacement for the 787 totaled 101 MNOK ($17.2m), significantly affecting quarterly results. This amount includes the cost of wet-lease, extra fuel and costs for accommodation, food and drink for delayed passengers.
Although the airline has only two 787s in service one can see how disruptive the impact has been on the airline’s operations. No doubt Boeing will be handling most (probably all these costs) and the airline might report this in its next results. The absence of any mention of compensation is glaring. There was talk of this earlier and no mention now is odd.
There are other 787 operators which have also seen their operations disrupted. After Boeing’s good results announced yesterday, 787 operators should be able to claw back disruption compensation without a public fight. Boeing is adding $5bn to its 787 program investment and costs. Some of that investment should find its way to these customers.