Norwegian Air Shuttle reported a net profit of 183 million USD in the third quarter, while simultaneously issuing warnings about a slowdown in fleet expansion. The setback results from a strike at Boeing, which delays the planned aircraft deliveries and impacts the airline's growth strategy.
The German budget airline stated on Friday that the strike at Boeing would further exacerbate delivery delays and thus reduce the planned fleet expansion to about 90 aircraft next summer to only 86. Originally, an increase to over 90 aircraft was planned. This adjustment means that Norwegian can only expand its capacity in 2025 at a slower pace than the expected 13 percent projected for this year.
The strike initiated by Boeing's largest union affects the production of models 737, 767, and 777. Apart from Norwegian, other airlines such as Deutsche Lufthansa and Ryanair are also affected by delivery delays. Lufthansa is currently waiting for the delivery of 41 Boeing aircraft and has to rely on older models, which impacts efficiency and customer service.
Despite the challenges, Norwegian recorded a revenue increase of 32 percent in the third quarter to 11.59 billion Norwegian kroner. This increase resulted from growth in both passenger and ancillary revenues, although operating costs have also risen. Norwegian's CFO, Harald Wilhelm, emphasized: "We are working intensively to pull all levers to improve our performance and prepare for potential ongoing market uncertainties.
Here is the translation of the heading to English:
"Norwegian's shares reacted negatively to the news, falling by 12 percent in European midday trading, nullifying this year's previous increase. The decline reflects investors' concerns about the impact of delivery delays and the associated challenges for the company's growth strategy.
With a view to the entire 2024 fiscal year, Norwegian has lowered its forecast for operating profit to between 2.1 and 2.4 billion kroner, compared to the previous estimate of 2.1 to 2.6 billion kroner. Despite these adjustments, the company emphasized that it is well-prepared for the winter season.
