Norwegian Air's shares rise after second-quarter profit beat

Norwegian Air reported Q2 core earnings above market expectations on Friday after a rise in unit cost levels helped offset the impact of a dip in demand on ticket prices. The airline said the quarter was characterised by strong capacity and an increase in passenger numbers, but that aircraft delivery delays from Boeing would slow growth in the upcoming year. Delays in deliveries from Boeing and Airbus have forced airlines to lease aircraft externally to meet capacity needs. Norwegian's CEO Geir Karlsen said the airline planned for at least 11-to-13 months of delays and did not have a date for when they would stop. Referring to Norwegian's contractual right to compensation from Boeing, Karlsen told Reuters he was sure the companies would reach agreement. "Even more importantly, what we would like to have is visibility on future deliveries so that we can plan the network in accordance to that," he said. Norwegian said last week delays had forced it to source external capacity of one-to-two aircraft. It also said demand had been lower than expected in the second quarter, which prompted it to cut its profit outlook. Norwegian said on Friday cash flow improved in the quarter and unit costs, or the average cost of flying an aircraft seat, fell 2% from a year ago, to 0.70 crowns. Kenneth Sivertsen, analyst at Pareto, said the company has offset some of the impact of wage increases for pilots and other inflationary pressures through operational efficiency.<br/>