Norwegian Air passenger income growth misses expectations in March

Norwegian has curbed its rapid growth this year to focus instead on cutting costs and turning a profit, while also raising 3 billion crowns from shareholders to boost its balance sheet. (Reuters)
Updated 04 April 2019
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Norwegian Air passenger income growth misses expectations in March

  • The grounding last month of its Boeing 737 MAX jets following the deadly crash of an Ethiopian jet, has forced Norwegian to lease other aircraft, further complicating its drive for profitability
  • The airline’s load factor stood at 85.4 percent for the month, beating a forecast 82.7 percent but was still down from 86.7 percent a year earlier

OSLO: Norwegian Air earned less money than expected from each traveler in March but its aircraft filled up at a faster pace than analysts anticipated, the budget carrier’s monthly traffic report showed on Thursday.
The grounding last month of its Boeing 737 MAX jets following the deadly crash of an Ethiopian jet, has forced Norwegian to lease other aircraft as the peak summer season nears, further complicating its drive for profitability.
While Norwegian has said it would seek compensation from Boeing for the cost of grounding its eighteen MAX fleet, its chief executive has also defended the aircraft model.
“We have had some productive meetings with Boeing where we have discussed how we can manoeuver through the difficulties the MAX situation is causing Norwegian,” Chief Executive Bjoern Kjos said in a statement.
Kjos, a former fighter pilot, on Wednesday said he had tested Boeing’s new flight control software in a simulator, finding it foolproof and adding he would gladly take his own family on board a Norwegian MAX aircraft.
Norwegian’s March yield, a measure of revenue per passenger carried and kilometers flown, rose to 0.33 Norwegian crowns ($0.0385) from 0.32 crowns in February, while analysts in a Reuters poll expected an increase to 0.34 crowns.
The airline’s load factor, showing how many seats are sold on each flight, stood at 85.4 percent for the month, beating a forecast 82.7 percent but was still down from 86.7 percent a year earlier.
While the yield lagged expectations, the higher load factor helped compensate the shortfall, said brokerage Pareto Securities, which has a buy recommendation on Norwegian’s stock.
The carrier’s first-quarter adjusted earnings before interest, tax, depreciation and amortization will likely swing to a profit of about 600 million Norwegian crowns ($69.93 million) from a year-ago loss of 880 million, Pareto added.
Norwegian has curbed its rapid growth this year to focus instead on cutting costs and turning a profit amid stiff competition, while also raising 3 billion crowns ($349.71 million) from shareholders to boost its balance sheet.
Its capacity expansion, as measured by available seat kilometers (ASK), peaked at 51 percent growth year-on-year last June and has since declined, hitting 11 percent in March, lower than the 12.4 percent that analysts forecast.
The mid-April Easter holiday is expected to boost Norwegian’s traffic numbers, the company said while noting that last year’s Easter had been in March.
“Easter will always affect the figures positively,” it said.


Unaoil’s former Iraq partner pleads guilty to bribery

Updated 38 min 12 sec ago
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Unaoil’s former Iraq partner pleads guilty to bribery

  • It is the first guilty plea to result from a three-year investigation by the Serious Fraud Office into suspected bribery and money laundering
  • Unaoil is a Monaco-based oil and gas firm

LONDON: The former partner in Iraq for Unaoil, a Monaco-based oil and gas consultancy, has pleaded guilty to five counts of bribery in the first conviction in a three-year criminal investigation by Britain’s Serious Fraud Office (SFO).
Basil Al Jarah, 70, pleaded guilty on July 15 to conspiring to give corrupt payments in connection with the award of contracts to supply and install single point moorings and oil pipelines in southern Iraq, the SFO said.
Al Jarah’s conviction, which comes six months before three other defendants in the case face a criminal trial in London, was announced after a judge lifted reporting restrictions in a pre-trial hearing on Friday, the SFO said.
Ziad Akle, Unaoil’s former territory manager for Iraq and Stephen Whiteley and Paul Bond, who worked for Dutch-based oil and gas services company SBM (Offshore), have pleaded not guilty.
Akle, 44, has been charged with three offenses of conspiracy to make corrupt payments. Bond, a 67-year-old former senior sales manager with SBM (Offshore), and Whiteley, a 64-year-old former vice president of SBM (Offshore) and one-time Unaoil general territories manager for Iraq, Kazakhstan and Angola, each face two counts.
Sam Healey, a lawyer at JMW Solicitors who is representing Whiteley, said his client “strenuously denied” all alleged offenses.
“Mr Whiteley co-operated fully with the SFO as they opened their enquiries and will rigorously defend the charges,” he said.
Lawyers for Al Jarah and Bond declined to comment. A lawyer for Akle was not immediately available for comment.
A spokeswoman for Unaoil declined to comment, while SBM Offshore has said it is company policy to not comment on past or current employees.