Norwegian posts NKr122m full-year net profit for 2011

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Norwegian's fleet renewal gave it a "major competitive advantage" in 2011, when it posted a full-year net profit of NKr122 million ($21 million), chief executive Bjorn Kjos said today.

The low-cost carrier's earnings before interest, tax, amortisation and rentals (EBITDAR) was NKr1.5 billion in the year ending 31 December 2011, up from NKr1.2 billion the previous year.

This was against operating costs of NKr9 billion, up from NKr 7.4 billion in 2010.

Norwegian said the rise in operating costs was due to a production increase and the soaring price of aviation fuel, which cost the company an extra NKr1 billion in 2011. It cut its unit costs - excluding fuel - by 11% in 2011.

Passenger traffic grew 26% to 17.4 million RPKs and capacity rose 23% to 22 million ASKs in 2011, leading to a two percentage point rise in load factor to 79%, compared with 2010.

Norwegian said its seasonally weaker fourth quarter was "particularly affected by tough competition, soaring fuel prices and costs related to the phasing-out of older aircraft" in 2011. As a result, it recorded a net loss of NKr133 million for the period.

EBITDAR remained stable year-on-year at NKr216 million in the fourth quarter of 2011, while revenues were up 18.2% to NKr2.5 billion.

Passenger traffic grew 23% on capacity growth of 21%. Load factor rose by two percentage points to 79%.

"In the fourth quarter we see a flatter trend, but the overall conclusion is that the fleet renewal gives Norwegian a major competitive advantage in a climate where several airlines are under pressure due to aging fleets and high fuel prices," says Kjos.

Norwegian took delivery of 16 Boeing 737-800s in 2011 and retired nine older aircraft from the fleet. The carrier has placed a firm order for 100 Boeing 737 Max and 22 737-800s and signed a memorandum of understanding with Airbus for 100 A320neos. Delivery is due to start in 2016.

Norwegian predicts a 15% growth in capacity in 2012.