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Low-cost carrier Norwegian has posted a net loss of nearly NOK1.5 billion (£133 million) for the first quarter of the year, but the company remains hopeful off the back of a 14 per cent increase in revenue.
The airline says its costs excluding fuel decreased 8 per cent during the quarter, with revenue reaching NOK8 billion (£715.4 million).
The results follow the start of a cost-cutting programme implemented by Norwegian in an effort to “return to profitability”, but the carrier says it is still assessing the financial impact of the grounding of its Boeing 737 Max fleet following two fatal crashes involving the aircraft model. However, it estimates the cost may be around £45 million.
Norwegian operates 18 B737 Max 8s, with further deliveries postponed while Boeing works on a software update for the aircraft’s Manoeuvring Characteristics Augmentation System (MCAS), which may have been a factor in the accidents.
While the carrier has made arrangements to re-accommodate flights that were due to be operated by the Max, the full impact has yet to be revealed.
Norwegian CEO Bjorn Kjos said: “We have had some productive meetings with Boeing where we have discussed how we can manoeuvre through the difficulties the Max situation is causing Norwegian.”
Kjos has previously claimed the airline will ask Boeing to foot the bill for the disruption.
Despite the aircraft grounding, Norwegian carried more than 8 million passengers in the first quarter – up 9 per cent on the previous year – with a load factor of 81 per cent.
Kjos added: “I’m very pleased with the positive developments this quarter, despite the 737 Max issues. We have taken a series of initiatives to improve profitability by reducing costs and increasing revenue. We are optimising our base structure and route network to streamline the operation as well as divesting aircraft, postponing aircraft deliveries and not least implementing our internal cost reduction programme, which will boost our financials. I am also pleased that booking figures and overall demand for the coming months looks promising.”
The airline recorded a £131 million loss in 2018 and a £27.4 million loss the previous year.