Dark clouds on the horizon
Norwegian Air misses Q3 profit expectations and lowers upper end of 2024 guidance range
Norwegian Air has lowered the upper end of its profit guidance for 2024 after reporting a lower-than-market-expected core profit for the third quarter on Friday. The company also said its capacity growth will slow in 2025 due to delays in Boeing aircraft deliveries.
The low-cost airline reported an operating profit of 2.13 billion Norwegian kroner (194.74 million dollars), below the company's forecast of 2.33 billion kroner. In the same period last year, the profit amounted to 2.17 billion kroner, a decrease of two percent.
The low-cost carrier announced that it expects its capacity growth to slow down in 2025, compared to the 13 percent forecast for 2024.
The company reduced its operating profit forecast for 2024 to a range of 2.1 to 2.4 billion kroner, including Wideroe.
In July, the Group lowered its annual forecast and stated that it expects an operating profit of between 2.1 and 2.6 billion kroner this year.
Longer delays in aircraft deliveries $BA (+0.77%) Boeing (BA.N) , which were exacerbated by the month-long strike by around 33,000 employees, and by $AIR (-0.48%) Airbus (AIR.PA) forced the airlines to lease aircraft externally to cover their capacity needs, driving up short-term costs.
Norwegian Air, on the other hand, said it had increased capacity in the third quarter and improved load factors at both the airline and its recently integrated acquisition Wideroe, a domestic competitor that operates smaller aircraft and serves only regional airports.
"Going forward, we will continue to work to streamline operations and identify additional synergies with Wideroe," CEO Geir Karlsen said in a statement.
He also said that the booking momentum for the seasonally weak fourth quarter was "encouraging across the group, both for leisure and business travel".