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Norwegian Air Shuttle ASA (OL:NAS) reported first quarter 2025 results on May 8, showing revenue growth despite seasonal challenges and an unfavorable Easter timing effect. The Nordic carrier posted a quarterly operating loss while advancing several strategic initiatives aimed at long-term profitability improvement.
Quarterly Performance Highlights
Norwegian Air reported group revenue of NOK 6.6 billion in Q1 2025, representing a 7% increase compared to the same period last year. Despite this growth, the company recorded an operating loss (EBIT) of NOK 611 million, with Norwegian Air contributing negative NOK 568 million and Widerøe subsidiary adding negative NOK 43 million.
The company highlighted that Q1 is traditionally its weakest quarter, with results further impacted by Easter falling in Q2 this year versus Q1 last year - an effect estimated to exceed NOK 400 million.
"Easter timing had a significant negative impact on our first quarter results, but this effect will be reversed in the second quarter," the company noted in its presentation.
Norwegian carried 5.1 million passengers in Q1, up 7% year-over-year, while capacity measured in available seat kilometers (ASK) increased by 16%. Load factor for Norwegian operations decreased by 2 percentage points to 82.5%, while Widerøe’s load factor improved by 3 percentage points to 69.8%.
As shown in the following chart of Norwegian’s traffic performance:
The company achieved notable cost improvements, with Norwegian’s unit cost excluding fuel decreasing by 11% year-over-year to NOK 0.54, partly supported by the purchase of previously leased aircraft and longer average sector length.
Strategic Initiatives
A key strategic move during the quarter was Norwegian’s purchase of 10 Boeing (NYSE:BA) 737-800 aircraft that were previously leased. This transaction generated a non-recurring gain of NOK 589 million in Q1 and is expected to deliver recurring annual savings of approximately NOK 200 million.
"Utilising our balance sheet for smart fleet decisions is a core part of our strategy," the company stated, noting that the aircraft purchase was initially financed with cash from its strong liquidity position.
Norwegian continues to execute its "Program X" initiative, which aims to deliver recurring profit improvements exceeding NOK 1 billion annually by the end of 2026 through commercial, operational, and cost reduction measures.
The company’s breakdown of operating profit factors illustrates both the challenges and strategic progress:
Another strategic focus is the expansion of Norwegian’s loyalty program. The Spenn loyalty currency, launched in November, now has 1.2 million earners and has processed 8.9 million transactions. Norwegian announced that leading retailer Reitan Retail will join Spenn as an equal owner alongside Strawberry and Norwegian, subject to regulatory approval expected during summer.
Forward-Looking Statements
Norwegian reported strong booking momentum heading into the summer season, with 7% more tickets sold compared to last year for May to August travel. The company stated there are "no signs of macro uncertainty in current bookings" and that "booked yield for May-August travel is stable versus corresponding date last year."
As illustrated in the booking trends chart:
The airline is moderating its capacity growth plans, projecting approximately 3% growth in Q2, followed by 1% in Q3, 2% in Q4, and a 3% reduction in Q4. This represents a significant slowdown from the 16% capacity growth in Q1.
Norwegian’s fleet is expected to remain stable at 88 aircraft for summer 2025, growing to approximately 96 aircraft by year-end. The company received three new Boeing 737 MAX-8 aircraft in Q1, with a fourth expected in May, as part of its order for 50 such aircraft.
The fleet outlook is presented in this chart:
Financial Analysis
Norwegian maintained a strong financial position with liquidity of NOK 10.5 billion at quarter-end. Net interest-bearing debt stood at NOK 5.1 billion, down NOK 0.7 billion compared to the previous year.
The company’s balance sheet shows total assets of NOK 39.3 billion as of March 31, 2025, with an equity ratio of 15.7%, down from 19.3% at the end of 2024, partly due to the aircraft purchase transaction.
The financial position is illustrated in this balance sheet overview:
Norwegian’s cash flow for the quarter showed a slight decrease in cash and equivalents from NOK 9.9 billion to NOK 9.4 billion, primarily due to investing activities of NOK 3.0 billion related to the aircraft purchase.
The company noted that jet fuel and foreign exchange rates moved favorably during Q1, with Norwegian having hedged 70% of its fuel needs for the current year and adding FX hedges for USD requirements.
Norwegian Air shares closed at NOK 14.47 on May 7, 2025, down 0.48% ahead of the earnings release, according to market data. The stock has traded between NOK 9.70 and NOK 15.49 over the past 52 weeks.
Full presentation:
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