Norwegian’s second quarter results are characterised by reduced growth and improved profitability, in line with the company’s strategy. Despite the reduced production growth and grounding of the Boeing 737 MAX aircraft, the underlying operating result before ownership costs more than doubled from the same quarter in 2018.
The underlying operating result before ownership costs was more than NOK 2.3 billion, the highest ever in a second quarter and NOK 1.2 billion higher than last year. The unit revenue (RASK) increased by 13% and the revenue per passenger per kilometer (yield) increased by 11%. For the second quarter, the total revenue was more than NOK 12 billion, an increase of 19% from the same period last year, primarily driven by intercontinental growth. Almost 10 million passengers flew with Norwegian this quarter, on par with the same quarter in 2018. The load factor was 88%, up 1.2 percentage points from last year.
Norwegian’s key priority is returning to profitability through a series of measures, including an optimised route portfolio and an extensive cost-reduction program. The production growth (ASK) in the second quarter was 6%, down from the peak growth of 48% in the second quarter of 2018. The company’s internal cost reduction program #Focus2019 continues with full effect and achieved cost reductions this quarter were NOK 554 million, consequently reaching the goal of NOK 1 billion so far in 2019.
The 737 MAX grounding has affected both demand, operating expenses and production negatively. Norwegian expects the negative impact on the 2019 results to be approximately NOK 700 million.
