Low-cost carrier Norwegian Air Shuttle, which exited bankruptcy protection in May, reported on Tuesday an improvement in its first-half earnings as the beleaguered travel sector picks up speed amid rising vaccinations.
In the first six months of the year, Norwegian posted a net profit of 1.6 billion kroner (€155 million) thanks to financial restructuring, compared to a loss of 5.4 billion kroner in the first half of 2020.
The company’s gross operating income – excluding restructuring costs as well as other charges such as interest and taxes – nonetheless remained in the red. The loss of 1.9 billion kroner compared to an operating loss of 467 million a year earlier, when the effects of the pandemic only really began to be felt in the second quarter.
The report “marks a clear improvement in both the financial situation, due to lower operating costs and the successful completion of the reconstruction process of the company, and the gradual ramp up of our operations in response to increased passenger demand,” chief executive Geir Karlsen said. “The results continue to be heavily impacted by international travel restrictions. However, Norwegian is now in a much stronger financial position,” he added.
Karlsen was chief financial officer until June when he replaced Jacob Schram, who was fired. He orchestrated the financial restructuring that enabled the airline to avoid bankruptcy.
The company has emerged leaner from the process, having negotiated a reduction of its debt, received new cash, shrunk its fleet and dropped its loss-making long-haul business in order to focus on the Nordic and European markets. At the same time, the airline sector has been slowly recovering from its near-paralysis during the pandemic, amid rising vaccination rates around the world and the easing of travel restrictions.
The company has emerged leaner from the process, having negotiated a reduction of its debt, received new cash, shrunk its fleet and dropped its loss-making long-haul business in order to focus on the Nordic and European markets
Up to 32 of Norwegian’s planes, of the 51 at its disposal, were in operation during the first half.
The company’s revenue plunged by 92 per cent, to 590.8 million kroner.
Due to the uncertainties brought on by the pandemic, Norwegian did not provide any financial forecast for 2021, but said it expected its situation to improve with around 50 aircraft in operation this year and around 70 in 2022.
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