Norwegian Air shares soar with possible record profits in sight

Norwegian Air shares jumped on Friday after it reported forecast-beating operating earnings in the fourth quarter, lifting its full-year result to an all-time high, and said it expected its profit to hit a new record this year.

The results mark a turnaround for the budget carrier, which only a few years ago could have stopped flying altogether, straining under heavy debts and hit by the pandemic. From once flying transatlantic, it now focuses on its core Nordic market.

The fourth quarter is normally a slow period for holiday travel in the northern hemisphere but Norwegian last month raised its earnings forecast for 2023 on the back of strong demand in the final two months of the year.

Shares in the company were up 13 per cent.

The carrier’s October-December operating profit came in at 328 million crowns (€29 million), above the 177 million forecast in a poll of analysts compiled by the company, and against a loss of 39 million a year earlier.

“It proves that the earnings recovery Norwegian has been through...they can still deliver record numbers, even though they fly significantly less than they used to,” said Sydbank analyst Jacob Pedersen.

"It has become a less complex company, and complexity is incredibly expensive within aviation."

The budget carrier said it had increased passenger numbers in the fourth quarter to 4.7 million passengers from 4.6 million passengers a year ago.

Its capacity - as measured by available seat kilometres (ASK) - is expected to rise by 12 per cent this year, while it expects 2024 operating profit of between 2.5 billion and 3.2 billion crowns, up from 2.2 billion crowns in 2023. – Reuters

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