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Norwegian Air Swings To Profit After Restructuring

By Dave Simpson

Norwegian Air NAS.OL has reported a full-year profit for 2021 in a turnaround from losses suffered the previous year, and said that booking trends point to busier travel ahead for Europe as COVID lockdown restrictions are lifted.

Details

The budget carrier's net result swung to a profit of 1.88 billion Norwegian crowns ($211.4 million) last year from a loss of 23 billion crowns in 2020.

Fourth-quarter revenue rose almost fourfold to 2.55 billion crowns from 670 million the year before even as the Omicron outbreak affected business in late 2021.

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"We are looking forward to welcoming more customers on board heading into the busier spring and summer seasons," Norwegian Air chief executive officer Geir Karlsen said in a statement.

"Booking trends show customers are planning and booking earlier in anticipation that the positive recent developments in regards to COVID-19 vaccinations and restrictions will continue in the long term," the company said in its earnings report.

The pandemic sent the indebted airline into bankruptcy proceedings from which it emerged in a slimmed-down version in May of last year with no long-distance network and a decimated fleet.

This year, the company plans to increase the number of aircraft in its fleet to 70 from 51 at the end of 2021. At its pre-pandemic peak, Norwegian Air had more than 160 planes.

In the fourth quarter, 3.1 million passengers travelled with Norwegian Air, up from 2.5 million in the third and far more than the 600,000 that flew with the airline in the final quarter of 2020.

Cash and cash equivalents rose to 7.7 billion crowns by the end of the fourth quarter from 7.6 billion three months earlier, Norwegian Air said.

As part of its court-ordered restructuring process, Norwegian Air converted almost all its debt to equity and struck deals with leasing firms to only pay for aircraft when they were actually in use, a so-called power-by-the-hour arrangement.

The company's shares have risen 9.6% so far this year.

Norwegian Air's February Traffic Rose 10-Fold Year-On-Year

The above news was followed by news that Norwegian Air NAS.OLhad a ten-fold increase in February passenger traffic compared to the same month last year and bookings rose to their highest since the COVID-19 pandemic reached the Nordic region two years ago, it has said.

The company is closely monitoring the impact from the Russian invasion of Ukraine and the subsequent spike in oil prices and thus on fuel costs.

The budget airline said it carried 643,000 passengers last month, up from 61,000 in February 2021, and the load factor of its planes in operation rose to 81% in February from 38% a year ago.

Norwegian last week reported a full-year profit for 2021 in a turnaround from losses suffered the previous year, and said booking trends point to busier travel ahead for Europe.

"When travel restrictions were lifted, we immediately noticed increased demand for flights. We will have a comprehensive summer program this year to meet this demand," Chief Executive Geir Karlsen said in a statement.

"The company has noted a very positive development in future bookings over the last period, and monitors closely the uncertain situation in Europe, the turmoil in the financial markets and the change in oil prices," Norwegian said.

As mentioned above, the pandemic sent the airline into bankruptcy proceedings from which it emerged in a slimmed-down version in May with no long-distance network and a smaller fleet, and with a sharp reduction of its debt.

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

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