14% 3Q drop in net profit for Norway’s budget carrier Norwegian Air Shuttle

Despite making a net profit of NOK373.8m ($57m) for the third quarter, Budget carrier Norwegian Air Shuttle’s figure was down 14% compared to the NOK435.9m ($66 million) reported for the same period in 2013. Additionally, the net loss for the nine months up to and including 30th September was NOK91.4m ($14m), considerably down on the profit of NOK515.5m posted for the same period a year ago.
Norwegian Air Shuttle was quick to explain the deficit and put it down to a number of reasons. Firstly there were costly wet leasing replacement aircraft being used because of technical problems with the Boeing 787 Dreamliner fleet. These problems, financially, extended to costs incurred for hotel bills and food and drink payments for severely delayed passengers. Once you add the fact that the Norwegian Krona had weakened as a currency to what Norwegian Air Shuttle described as “considerable” cost implications of delayed approval from the US Department of Transportation, and you begin to get a clearer picture of why this has not been a good time for the airline. The airline has indicated it is prepared to wait as long as is needed to obtain U.S. Department of Transportation (DOT) approval for its Ireland-based long-haul subsidiary airline, Norwegian Air International (NAI), to fly between Europe and the U.S.A., but the delay is proving very costly.
However it wasn’t all doom and gloom for the Norwegian airline as they indicated there had been “strong growth” in all European markets. This resulted in a load factor rise to almost 85%, in spite of a capacity increase of 36% in the third quarter. Third-quarter operating turnover was up 30% year-on-year to NOK6.34bn, though operating costs were also up 38% to NOK5.12bn and unit cost for this last quarter down 1% (4% excluding fuel). Operating revenue for the year to date was up 27% compared with a year ago to NOK15bn, though operating costs increased 44% to NOK13.4bn and unit cost down 2% (3% excluding fuel). Yield was down 11% for the quarter and 16% for the year-to-date. The number of passengers for the quarter was up 17% to just over 7 million compared to just over six million the previous year. For the year to the end of September the passenger numbers were up 19% to 18.33 million compared to last year.