Norwegian Air's fleet expansion cost forecast sinks shares

Norwegian Air warned on Thursday costs are rising faster than expected as it expands worldwide, knocking its shares. The airline is building up its transatlantic operations, has up to 29 Dreamliners on order from Boeing for $18.5b and is considering ordering more. Its underlying unit cost, which excludes fuel, was 0.32 crown in Q4, down 1% year-on-year, a lower-than-expected reduction for some analysts. "Q4 results show another disappointing cost performance," said Ross Harvey, an analyst at Irish brokerage Davy. "The underlying cost performance was again disappointing – down 1 percent versus our -3 % expectation, with the largest escalation occurring across peripheral cost lines in anticipation of 2017 growth." "Cost guidance for 2017 has increased by circa 2.6% on previous guidance, which means we will revise our expectation of a 4.7% improvement (at constant currency) downwards.<br/>