Norwegian misses zero-capacity-growth goal but ups unit revenue

Norwegian’s 2019 capacity was 1% higher than the previous year despite its pledge of zero growth as part of efforts to return to profitability. However, the airline slashed capacity by a quarter in December and saw its unit revenue for the month rise 21%. Full-year unit revenue was up 7% in 2019. Traffic growth for the year, as measured in revenue passenger-kilometres, was double the 1% capacity increase, resulting in a 0.8 percentage point rise in load factor to 86.6%. New CE Jacob Schram, who took the helm earlier this month, says that throughout 2019 Norwegian “worked on reducing the capacity in line with demand and worked continuously to set a route structure adapted to the large seasonal fluctuations across the industry”. He praises the airline’s employees for making “an impressive effort delivering on the strategy of moving from growth to profitability”, although the airline acknowledges that the 1% capacity growth last year was “a little over the previously announced zero growth”. Norwegian made a full-year operating loss of US$438m in 2018, having pursued an aggressive growth strategy across Europe and on transatlantic routes. It has since scaled back its expansion plans by selling aircraft and axing unprofitable routes. These measures helped deliver a 64% rise in Q3 2019 operating profit, to NKr2.97b, and a nine-month operating profit of NKr2.13b.<br/>