Norwegian cautiously positive on booking trends after strong summer

Norwegian has reported “encouraging” booking trends through to the end of the year, after it achieved its second-highest-ever operating profit during Q3. Its operating profit of NKr2.17b ($194m) for the July-September period – which equates to an EBIT margin of 25% – was only beaten once before in the company’s history, in the same three months of 2019, when the carrier’s fleet was around twice as large. It was achieved on revenue of NKr8.78b during the seasonally strong period, which was up by more than NKr1.5b year on year. Its net profit more than doubled on the same basis to NKr2.04b. Ticket revenue yields were up 6% year on year, as strong travel demand continued to support earnings. Load factor dropped slightly year on year, to 87.4% from 88.8%, on capacity up 17% on the same basis. “Thanks to the outstanding effort of the entire Norwegian team, we can look back at one of the best quarters in our 21-year history,” says CE Geir Karlsen. “I am very satisfied that our financial results are strong. “We have also delivered an operational performance as one of the absolute top airlines in Europe with a remarkably low number of cancellations and strong on-time performance.” Norwegian says its liquidity position increased to NKr9.4b at the end of the quarter and that it is forecasting a full-year operating profit of NKr1.8-2.0b. It notes a cost impact from the weakening of the Norwegian krone against the US dollar and euro, alongside inflationary impacts on supplier costs and employee salaries – factors which are pushing up unit costs. The carrier says it has “not observed any sign of weakness in forward bookings”, but adds that it remains “mindful of demand uncertainties following a potential deterioration in consumer confidence”.<br/>