TORONTO — With transatlantic growth in the pipeline, including new flights out of Montreal and Hamilton, Norwegian Air has reported a surprising net profit for Q2 2018.
The budget airline posted a net profit of NOK300 million (approximately Can$48,540,000) in the second quarter, compared to a loss of NOK691 million a year ago.
The result is affected by a reduction in unit costs, which has decreased by 9% this quarter, and with 19% excluding fuel. One-offs have also contributed to the cost reduction in Q2.
In this quarter, the airline saw stable load with the highest absolute growth in its history. Capacity (ASK) reached 48% growth, while growth in traffic (RPK) was 46%.
Norwegian has grown rapidly over the past few years, expanding international traffic and adding new bases, destinations and markets to its portfolio. It carried 10 million passengers during Q2, an increase of 16%. Load factor for the second quarter was 86.8%, down 0.9 percentage points compared to the second quarter last year.
“Despite being at the peak of our growth phase, we have been able to present a profit and decreased unit costs during the second quarter,” said CEO Bjørn Kjos. “Going forward, the growth will slow down and we will reap what we have sown for the benefit of our customers, staff and shareholders.”
During Q2, Norwegian has introduced three Boeing 787-9 Dreamliners and two Boeing 737 MAX 8 aircraft to its fleet. In total, this year the airline will take delivery of 11 Boeing 787-9 Dreamliners, 12 Boeing 737 MAX 8, and the two Boeing 737-800 aircraft that have already been delivered. With an average age of only 3.7 years, Norwegian’s fleet is considered one of the most modern fleets in the world.
In recent weeks, Norwegian has rebuffed two separate takeover bids from IAG, and is currently reportedly in talks with Lufthansa. In June, the airline once again made headlines by announcing its entry into Canada, with new service out of Montreal to Guadeloupe and Martinique starting in fall 2018, and Hamilton to Dublin launching in spring 2019.