OSLO: Norwegian Air cut its flight program last month, removing unprofitable routes in a bid to stem the budget carrier’s losses, its traffic report showed on Thursday.
Overall capacity, a measure of distance flown and the number of seats available (ASK), fell by 27 percent year on year, it said. Analysts in a Reuters poll had on average expected a 23 percent fall.
The move helped Norwegian fill remaining flights, raising the number of seats sold on each aircraft and boosting its yield — income per passenger carried and kilometer flown — by 12 percent to 0.37 Norwegian crown ($0.04), beating a 0.35 crown forecast.
Norwegian has shaken up the transatlantic travel market with low fares, but expansion also brought mounting debts. The company raised cash from its owners in November for a third time in 20 months. The airline on average filled 83 percent of seats in November, up from 78.8 percent last year.
“The planned capacity reduction has improved the figures ... we continue to deliver on our strategy of moving from growth to profitability,” Acting Chief Executive Geir Karlsen said.
Prior to October, when Norwegian’s capacity fell by 5 percent from the same month of 2018, the airline’s year-on-year ASK had risen every month since the firm went public in 2003.
The company has set a target of a 10 percent cut in ASK for 2020 compared to 2019, it said in October.
“We have adjusted our route portfolio and capacity for the coming winter season and summer seasons to ensure that we are well positioned to meet demand,” Karlsen said.
As temporary CEO since July, Karlsen has postponed debt payments, raised cash, brought in a Chinese leasing firm to take stakes in its fleet and partnered with US carrier JetBlue .
The company announced on Wednesday the sale of its domestic network in Argentina, launched 14 months ago, to JetSMART.
Karlsen, who is also chief financial officer, returns to being CFO and deputy CEO when industry outsider Jacob Schram takes over next year.