Norwegian’s results for the third quarter of 2021 show continued positive progress following its reconstruction processes. The airline noted that passenger demand was returning across all markets and forward bookings remain strong leading into the summer 2022 season.
Profit before tax (EBT) showed a net profit of NOK 169 million compared to a loss of NOK 980 million in the same period in 2020. During the third quarter, close to 2.5 million passengers travelled with Norwegian, compared with approximately one million during the same period last year. Production (ASK) increased by 130 percent and passenger traffic (RPK) increased by 177 percent compared with the third quarter in 2020. The load factor was 73.1 percent, an increase of 12.5 percentage points. Average sector length increased by 20 percent. At the end of the third quarter of 2021, the total fleet comprised 51 aircraft.
Continued cost control throughout the company combined with low cash burn has resulted in a strong financial position entering into the winter period with NOK 7.6 billion in cash and equivalents.
“The third quarter results clearly demonstrate that the actions taken across the organisation to safeguard the future of Norwegian by lowering debt and liabilities, while focusing on cost efficiencies, have succeeded. We are now in a strong financial position going into the traditionally more challenging winter months. We have seen a positive trend in forward bookings month on month and an increasing number of passengers are choosing to fly Norwegian across our European network,” said Geir Karlsen, CEO of Norwegian.
Norwegian continues to selectively add to its growing aircraft fleet through signed LOIs, subject to approvals and documentation, for the lease of up to 13 Boeing 737-800 NG aircraft at “favorable terms” from experienced lessors that “have prior relationships with Norwegian”. The aircraft are scheduled to begin delivery in Q4 2021 through Q1 2022 to deliver Norwegian’s announced Summer 2022 flying program with flights to over 250 destinations.
The lease terms are between five to eight years, depending on aircraft age. They include ‘power-by-the-hour’ (PBH) arrangements for both the IATA Winter Seasons 2021/22 and 2022/23, giving Norwegian necessary flexibility to manage capacity through the low season. Finally Norwegian has the right, under some of the leases, to substitute the subject 737-800 NG aircraft for new technology narrow-body aircraft from either Boeing or Airbus: “This will enable Norwegian to continue its focus on offering the most environmentally friendly travel options for our customers,” said the airline.