The once high-flying stock in Norwegian Air Shuttle, which operates low fare carrier Norwegian Air, all but crashed on Thursday after the company reported heavy losses. Its share price was down 9.58 percent when the Oslo Stock Exchange closed, and the airline’s chief executive warned that costs need to be cut.
“We must prepare to meet this situation,” Bjørn Kjos told news bureau NTB after admitting that 2014 had been a bad year for the airline. Its intercontinental expansion has been turbulent at best, mostly because of problems with the airline’s new Boeing 787 Dreamliners that resulted in near-constant delays, cancellations and angry passengers.
“We’ll have to cut costs and boost productivity,” Kjos said. “We just have be more efficient.” The airline logged losses of more than NOK 1 billion last year despite a 25 percent increase in revenues.
Analysts said Norwegian’s results were worse than expected, leading to the stock sell-off on Thursday. They attributed the losses to seasonal weaknesses in the most recent quarter, low ticket prices, extraordinary expenses and the decline in the value of the Norwegian currency, the krone.
Several analysts still have faith in Kjos and the airline he launched just over 10 years ago, though. Ivar Andreas Lømmechen Gjul at Fondsfinans thinks 2015 will be a much better year for Norwegian because of “a better market balance,” lower fuel prices and an increase in airfares.
newsinenglish.no staff
