Norwegian Air cites Omicron and Ukraine crisis for Q1 loss
James ChappleNorwegian Air has said the emergence of the Omicron variant of Covid-19 and Russia’s invasion of Ukraine conspired to consign it to a deeper first-quarter loss (Ebit) than anticipated.
The carrier on Friday (13 May) posted a NOK 849 million (£70 million) Q1 operating loss (three months to 31 March), a period Norwegian said was already "the seasonally weakest quarter".
This, though, is up from a NOK 1.462 billion (£122 million) operating loss in Q1 2021, while Norwegian also recorded a reduced pre-tax loss of NOK 1.031 billion (£86 million), down from NOK 1.189 (£99 million) a year earlier.
It follows profits of NOK 117 million (£10 million) in Q4 (three months to 31 December 2021).
"Passenger demand in the first half of the quarter was negatively impacted by the outbreak of the coronavirus, but recovered significantly through the second-half of February and through March," said Norwegian, which ended the quarter with cash and cash equivalents of NOK 7.5 billion (£620 million).
"The figures demonstrate Norwegian’s ability to adjust capacity to market demand, and discipline in conserving liquidity through the seasonally weakest quarter of the year. Continued cost control and liquidity discipline led the company to conserve its cash position."
Norwegian carried 2.2 million passengers during Q1, up from just 0.2 million a year earlier during the height of the pandemic in early 2021. Load factor was 76.9%, up from 38.5% in Q1 2021.
“We have adapted to fluctuations in demand quickly and efficiently, and we have managed to protect our strong liquidity position even through a challenging period," said Norwegian chief executive Geir Karlsen.
"The increase in bookings ahead of the summer season is significant, and we look forward to welcoming our customers onboard the close to 280 routes we have on sale."
Norwegian added: "Looking ahead, Norwegian is well positioned to respond to increasing passenger traffic and strong pent-up demand ahead of the busy summer 2022 leisure season.
"Travel restrictions have been lifted across the Nordics and all key European destinations, and our customers now have a wide selection of European travel destinations to choose from.
"Booking trends currently show customers are planning and booking travels earlier, and that there is higher willingness to pay for air travel across Norwegian’s network."
On Ukraine, the carrier said: "In February, Russia initiated a military invasion of Ukraine. Strict sanctions have been imposed by the United States, the EU and other countries.
"Following the invasion, international capital markets have seen increased volatility and the oil price has spiked, resulting in increased fuel cost for Norwegian. "
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