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Discount carrier Norwegian Air, which has been rapidly expanding its transatlantic route network, reported a 2017 net loss of $38.5 million. The result was fueled by a fourth-quarter net loss of $118.5 million.
“We are not at all satisfied with the 2017 results. However, the year was also characterized by global expansion driven by new routes, high load factors and continued fleet renewal,” CEO Bjorn Kjos said in a prepared statement Thursday.
Norwegian grew its available seat miles by 28% during 2017, and expansion was especially rapid in the transatlantic corridor. In the third quarter the carrier reported 79% passenger growth to the U.S. year-over-year. This year Norwegian plans to nearly double capacity into the U.S. as it begins flying to Austin and Chicago; beefs up U.S. service from Paris and London; and introduces transatlantic service from Milan and Amsterdam.
The expansion of Norwegian, Wow and other discount transatlantic carriers has forced legacy airlines in both Europe and the U.S. to introduce their own low-cost, unbundled products. In addition, IAG, parent of British Airways, founded its own ultra-low-cost transatlantic carrier, called Level, last year. Meanwhile, Lufthansa is expanding the U.S. route network of its discount unit, Eurowings.
Norwegian’s losses during the fourth quarter came even as revenues increased 30% year-over-year and load factors were a strong 85.3%. The carrier attributed the losses to rising fuel costs as well as to major investments it made late in the year in pilot and cabin crew training. Costs also rose precipitously as a result of growth.
“Norwegian is far better positioned for 2018, with stronger bookings, a growing network of intercontinental routes complimenting our vast European network and not least, a better staffing situation,” Kjos said.
He added that the carrier’s expansion will peak in the second half of this year.
Source: travelweekly.com