Norwegian cuts full-year profit outlook over softer traffic and higher costs

Scandinavian budget carrier Norwegian has revised downwards its full-year operating profit forecast, to NKr2.1-2.6b ($199-246m) – including the contribution from newly-acquired regional operator Wideroe. Norwegian had previously indicated an operating profit of Nkr2.5-3.2b but this excluded any Wideroe profits. It states that the revision is based on a softening of traffic during Q2. “Primarily due to a significant capacity increase on longer flights, Norwegian experienced a slight decrease in yield and load factor,” says CE Geir Karlsen. Load factor during June, while up on April and May, was down by one point compared with the same month last year. Norwegian adds that delivery delays from Boeing has “forced” the airline to source one or two aircraft externally to supplement summer capacity. The airline also says a higher-than-expected salary settlement for its pilot corps during collective bargaining, and effects of a weaker Norwegian currency, have contributed to the situation. Norwegian had forecast that unit costs, excluding fuel, would be flat compared with last year, but its revised outlook indicates that the figure will instead increase by a “low single-digit percentage”, based on jet fuel prices and foreign exchange data.<br/>