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Norwegian Air Boosts April Traffic With Cheaper Tickets

By Dave Simpson

Norwegian Air lifted passenger traffic by 44% year on year in April as its long-haul expansion accelerated, though tickets were sold at lower prices than analysts had expected.

Norwegian reported a yield -- income per passenger carried and kilometre flown -- of 0.35 Norwegian crowns, missing a forecast of 0.39 crowns in a Reuters poll of analysts.

"As a result of the capacity increase we have offered a high volume of low-fare tickets to attract new customers, consequently impacting the yield this month," chief executive Bjoern Kjos said in a statement.

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London-listed IAG last month took a 4.6% stake in the company, triggering interest from other suitors, Norwegian said on April 26.

Norwegian is pursuing a massive transatlantic expansion to replicate the low-cost model that worked for European flights in an effort to turn around its loss-making operation.

The airline's capacity, known as available seat kilometres (ASK), rose by 51% year on year, beating a forecast of 47.7%, while revenue-generating kilometres flown (RPK) grew by 44%, lagging the 45.1% forecast.

Brokers Pareto Securities, which hold a "buy" recommendation on Norwegian's shares, said the traffic data would have a negative effect on core operating earnings (EBITDA) of 400 million Norwegian crowns ($49.6 million).

Pareto said that an earlier Easter holiday period this year, finishing in March, had a negative impact on demand, but it believes that the airline is set for a strong summer season.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition. 

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