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.


More than 100 Saudi groups at Dubai’s GITEX week

Updated 22 September 2019

More than 100 Saudi groups at Dubai’s GITEX week

  • GITEX is an international platform

DUBAI: More than 100 Saudi organizations, including government entities, private companies and startups, are participating at the upcoming GITEX Technology Week in Dubai, from Oct. 6 to 10, indicating an increase in Saudi participation from last year at the annual technology gathering.

Bringing in one of the biggest contingents at the event, at 114, Saudi Arabia is also an official partner of GITEX this year, which is expecting to host more than 100,000 visitors over four days at the Dubai World Trade Centre (DWTC).

“There’s a lot of collaboration and integration in this region — there’s a lot of learning and sharing. GITEX is an international platform. This is where the Saudi contingent comes — from the big enterprise sector to the startup ecosystem — to interact with hundreds and thousands of visitors from over 140 countries,” Trixie LohMirmand, senior vice president of events management at DWTC, told reporters on Sunday.

LohMirmand also noted a spike in Saudi participation at the GITEX Future Stars, a concurrent event that focuses on the region’s startup community.

“We have a big Saudi Innovation Day. In fact, Saudis are again bringing a big contingent of startups. It’s led by the deputy minister of communications from Saudi Arabia to explore partnerships and discuss the opportunities in the region, particularly for startups,” she said, referring to the three special sessions that will focus on the Kingdom’s technology drive.

This increase in participation, LohMirmand said, is a reflection of a bigger “impetus on innovation and the getting the startup community going” in the region.

“We see a lot of new tech coming out, so there’s a lot of interest to give these companies an opportunity to connect to the rest of the world. When you come to GITEX, we connect you to the rest of the world — we host over 500 investors from all around the world, including from Silicon Valley,” she added.

Firat Aktas, DWTC’s director of brand innovation and communication, stressed: “You can see what’s happening around the world — the Saudis are showing their ambition very clearly in various industries.”

Earlier this year, the Saudi Telecom Company signed a deal with Swedish telecommunications company Ericsson to launch commercial 5G services in the Kingdom. “The roll-out continues. It’s a huge deployment in different parts of Saudi Arabia,” Wojciech Bajda, head of Gulf Council countries and global customer unit zain, told Arab News. “The focus for our customers currently is to understand how to monetize 5G, how to make sure there’s an industrial application of 5G in Saudi Arabia.”

Bajda also said they are looking at introducing 5G to different sectors in the Kingdom such as mining, and oil and gas. “We have engagements with different industries in trying to prototype together, and see if there’s something relevant for Saudi Arabia, and for our customers like the Saudi Telecom Company to pick up and do a full implementation,” he added. 

What to expect at GITEX this year 

This year’s GITEX, which has the theme “Synergizing the Mind and Technology Economy,” will highlight the region’s 5G adoption, as well as other futuristic concepts such as artificial intelligence (AI), robotics, and immersive technology.

LohMirmand said the dwelling time for GITEX visitors has increased over the years, owing to the gathering’s massive content offering.

“We are measuring more in terms of dwelling time. You can have 100,000 people come one day and do, but now the trend for us is we’re seeing them staying longer. Because there’s so much content, there’s so much knowledge, and so many companies with new technology, dwelling time is much longer, averaging 3.5 to 4 days,” she explained.

“Visitors and exhibitors are having deeper and more meaningful interactions at the show.”

The halls of DWTC will be divided into six sectors: 5G, AI, Future mobility, GITEX lifestyle tech, and Smart cities. It opens Oct. 6.