Norwegian Air makes big loss as demand wiped out

Norwegian Air made a massive loss last year following a near wipe-out of travel demand.

The airline's loss was 16.63bn kroner ($1.86bn) in the fourth quarter and NKr23.04bn during 2020, compared with respective losses of NKr1.87bn and NKr1.61bn respectively in the year-earlier periods.

The airline operated just 15 out of 131 aircraft during the fourth quarter, carrying around 574,000 passengers on mostly domestic routes. Overall fourth-quarter passenger numbers declined by 92pc year on year, with capacity in available seat kilometres (ASKs) down by 96pc. The airline's load factor was down by 32.5 percentage points compared to the same quarter in 2019.

Norwegian entered into an examinership process in Ireland and a restructuring process in Norway after which it announced an end to all long-haul operations to focus on its Nordic and European network. The airline plans to serve these markets with 50 aircraft in 2021, but any ramp-up in operations is dependent on the development of the pandemic, it said.

Norwegian is dependent on a successful exit from the examinership and reconstruction process in order to continue operating beyond the first quarter of 2021.

Norwegian's fuel expenses fell to Nkr2bn in the full year, from Nkr12.6bn in 2019, and its fourth-quarter expenses resulted in gains of Nkr4.8mn as a result of fuel hedges in place. It hedged 90,000t of its consumption for the fourth quarter at an average $598/t, of which 70,000t was unused. The airline made fuel hedging gains of Nkr93mn during the quarter. It has no fuel hedging positions for this year.

The carrier's fuel consumption fell by 95pc year on year in the fourth quarter to 20,000t, and its full-year consumption was down by 81pc at 362,000t. The suspension of all its long-haul operations will result in long-term declines in fuel consumption. Capacity offered in January was down by 98pc on the year, with passenger demand down by 96pc.

"The pandemic continues to have a negative impact on our business as travel restrictions remain," chief executive Jacob Schram said. "We are doing everything in our power to come out of the examinership as a stronger, more competitive airline and we look forward to welcoming more customers on board as travel restrictions are lifted."

By Florence Schmit