High fuel prices hit Norwegian’s 1Q11 results

Norwegian has reported a net result after tax for the first quarter of 2011 (1Q11) of NOK –293 million, which the airline puts down to soaring oil prices adding more than NOK 140 million to the first quarter fuel bill compared with 1Q10.

The company transported 3.1 million passengers in 1Q11, 14% more than the same quarter last year while the turnover was NOK 1.9 billion, an increase of 19%. Production increased by 28%.

“This has been a challenging quarter, primarily due to the high oil price and currency loss. However, on the positive side, we see a good passenger and production growth as well as good pre-sale of tickets,” remarked CEO Bjorn Kjos.

“We have made significant investments in new business routes in Sweden and not the least in a large new investment in Finland. This has resulted in extraordinary costs in the order of NOK 100 million in first quarter,” Kjos noted. “With the same fuel – and currency conditions as last year, adjusted for start-up costs of NOK 100 million, we have an improvement of nearly NOK 50 million compared to last year.

“The replacement of the fleet with more new and more fuel-efficient aircraft will continue to make us much more robust against high fuel prices. Our fuel consumption has decreased by 6% per seat since the same time last year,” said Kjos.

Seven new Boeing 737-800s have been put in to operation during the first quarter of 2011, while, at the same time, smaller and older Boeing 737-300s have been phased out. Norwegian has 14 more new 737-800s now compared to a year ago. Later this year, another eight new aircraft will be delivered to Norwegian from Boeing. As of today, the company has a total of 57 aircraft in the fleet.

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