Earnings call transcript: Norwegian Air Shuttle Q2 2025 sees revenue rise, stock jumps

Norwegian Air Shuttle ASA, with a market capitalization of $703 million, reported a strong second quarter for 2025, with revenue reaching NOK 10.3 billion, marking a 10% increase from the previous year. The company’s stock surged by 7.62% in pre-market trading, reflecting investor optimism following the announcement of its first-ever dividend and robust financial performance. According to InvestingPro analysis, the stock appears to be fairly valued at current levels. The earnings per share (EPS) forecast was revised upward, contributing to the positive market response. InvestingPro has identified 13 additional investment tips for Norwegian Air Shuttle - unlock these insights with a subscription.

Key Takeaways

• Norwegian Air Shuttle’s Q2 revenue increased by 10% year-over-year.
• The stock price rose by 7.62% following the earnings announcement.
• The company declared its first-ever dividend of NOK 0.9 per share.
• Norwegian acquired Vidre regional airline, enhancing its market position.
• Strong summer booking trends with a 10% increase in ticket sales.

Company Performance

Norwegian Air Shuttle demonstrated significant growth in the second quarter of 2025. The airline’s revenue rose by 10% compared to the previous year, a testament to its strategic initiatives and market adaptability. The company’s operating margin improved to 12.2%, supported by a yield increase of 7% and a load factor up by 3%. The acquisition of Vidre regional airline and the launch of a new distribution platform are expected to bolster its competitive edge in the Nordic aviation market.

Financial Highlights

• Revenue: NOK 10.3 billion (10% increase year-over-year)
• Group EBIT: NOK 1.25 billion (more than doubled from last year)
• Operating margin: 12.2%
• Yield: 7% increase
• Load factor: 3% increase

Earnings vs. Forecast

The company’s EPS forecast was adjusted upward, reflecting confidence in future earnings potential. The upward revision of EPS expectations suggests a positive outlook, aligning with the company’s strategic growth initiatives.

Market Reaction

Following the earnings announcement, Norwegian Air Shuttle’s stock price experienced a notable increase of 7.62%, reaching a price of 16.88. This movement positions the stock closer to its 52-week high of 17.23, indicating strong investor confidence in the company’s future prospects. InvestingPro technical indicators suggest the stock is currently in overbought territory, with impressive returns of over 11.5% in the past six months. The stock’s beta of 0.61 indicates lower volatility compared to the broader market.

Outlook & Guidance

Looking ahead, Norwegian Air Shuttle plans to improve its cost structure through the Program X cost optimization initiative. The company is guiding CASK ex-fuel for 2025 down to low-mid single digits and is considering a potential 50 aircraft order. Additionally, it aims for a NOK 1 billion profit improvement by 2026, with continued focus on enhancing its interlining capabilities following the Vidre acquisition.

Executive Commentary

"We have laid the basis for a sustainable profitable airline," stated Sainte Harald Eiger, underscoring Norwegian’s commitment to long-term growth. Hans Joergen Viibstad highlighted, "We are now in a dividend position," marking a significant milestone for the company. Ger Carlesen added, "We like to compete with SAS, and we are competing hard every single day," reflecting Norwegian’s competitive stance in the market.

Risks and Challenges

• Potential US-China trade tensions could affect aircraft deliveries.
• The Nordic aviation market remains competitive, requiring strategic agility.
• Corporate travel levels are still below 2019 figures, posing recovery challenges.
• Economic uncertainties could impact consumer travel spending.
• Currency fluctuations, particularly NOK/USD, may affect financial results.

Q&A

During the earnings call, analysts inquired about the potential impact of labor strikes during the peak season, to which Norwegian assured there were no risks. The company also addressed its competitive positioning against SAS and the acquisition of Air France-KLM SAS, which it views neutrally. Booking patterns remain consistent with previous years, and Norwegian is well-hedged against NOK/USD exposure.

Full transcript - Norwegian Air Shuttle ASA (NAS) Q2 2025:

Jasper Hathepeit, VP of Investor Relations, Norwegian: Good morning, and welcome to the second quarter presentation for The Norwegian Group. My name is Jasper Hathepeit, and I am the VP of Investor Relations here at Norwegian. Today’s presentation will be held by our CEO, Ger Carlesen and our CFO, Hans Joergen Viibstad. As this is a very significant day for Norwegian, we will also hear some opening remarks from our Chair of the Board, Sainte Harald Eiger. The presentation will be followed by Q and A from the audience and the web.

Please go ahead, Sainte Harald.

Sainte Harald Eiger, Chair of the Board, Norwegian: Thank you. Good morning. As you said, this is a quite a special day. And therefore, I decided to join and present two pages first and even take on my red tie on the warmest day in Oslo this year. Why is it a special day?

Well, it’s because it’s the end of the first leg of the post restructuring journey of Norwegian and it’s the start of the second leg. There’s important number to note, which I will revert to, which is NOK 5,800,000,000.0. First, a bit shortly on where we are. We have laid the basis basically for a sustainable profitable airline. We are best in all the four Nordic countries among the leading airlines measured by value for money, basically providing value to our customer at a low cost, which of course is the core of the mission of Norwegian.

We are leading in Europe on on time performance with close to zero cancellations. We are high on customer satisfaction and brand recognition across all countries. We capture market shares for corporate travel, which of course is an important value driver for the airline. And we have expanded Norwegian Reward into a very attractive loyalty program with attractive benefits. We are centered on the route profitability.

No big moves, but a step by step approach that basically builds, profitability in a sustainable manner. We will fill the the market with necessary capacity, basically providing, whatever capacity is needed across the four Nordic countries. And we add, profit profitable routes one by one. We have, as I will talk through, numerous initiatives to lower cost and manage seasonality, which of course is a key driver, for the Norwegian and an area of major differentiation compared to the situation in the past. We see that we are actually among the global leaders in aviation on measured by EBITDA margins, basically, the operating margins from our activity.

But we have had way too much leakage in the high ownership cost of our airplanes, which basically leads to a high EBITDA margin, but not similarly high EBIT margin. This is something that we have addressed now through a number of initiatives. Those initiatives and their delivery is not by coincidence, but it is it is a result of a deliberate effort by the management to take, charge and basically do whatever is possible to lower our ownership cost, basically the cost of the airplane, including the capital charges. And we see further initiatives working closely together with the leasing companies, of course, leveraging the strength of the balance sheet that we now have in Norwegian. We have also grown through complementary business ventures.

We acquired Vindre, the regional airline in The Nordics in 2024 in 100% cash acquisition at the price earning ratio of around two. It’s a strong customer proposition with seamless interlining. And we see a lot of potential. We’re also using this as a way to drive increased inbound travel, which which of course is incredibly important for Norway, for the tourism and for the regional parts of Norway. This business combination only gets better on a day by day basis.

So there’s no doubt at all that this was the was an important move for Norwegian that really took us a a big step forward. A bit surprising to some, but really something that has paid off in the big way and that will pay off further in the future. Similarly, we spend. It was a big investment by Norwegian to spend the time on developing a completely innovative loyalty program across the Nordics. It was a big investment and also basically stepping a bit outside the normal remit of an airline.

But again, we see a huge upside potential. More to come in the years that follow. We already have strong partners in the Nordic hotel chain, Strawberry, and of course, one of the largest Nordic retailers, right hand retail. Up on the right hand side, we see the group revenue, with quite a remarkable growth, since 2022. The second, chart basically shows that this has been achieved, in a profitable way.

So basically, modest profitability pre pandemic, huge losses, of course, in the years of the pandemic, and then, sustainable profitability the years thereafter. And based on consensus for 2025, the black box on the right will get much larger. The fleet has also grown, of course, grown through organic growth in the legacy Norwegian fleet and also through the Widro acquisition. Then to the chart that indicates why this is a special day. We are, as I said, at the end of the first leg of the journey, starting on the second.

In 2021, in the pandemic, we emerged from reconstruction. First, paid NOK $825,000,000 in claims to various creditors. In ’22, we paid, down on a on a what’s called a retained claim bond, basically a clear a bond that reflects the the claim of, again, of the creditors. We paid down another 35 in ’23, And also, we did a full repayment of a specific Norwegian bond called Nass 13 for around NOK $450,000,000. Then in 2024, we went on and did a new repayment.

And then what we are now doing is major step. First, we spend NOK 90,000,000 to buy back the so called hybrid bond, which then helped us to avoid a major dilution of the shareholder value. And we have also now announced and we’ll execute on that in August that we’ll set aside around NOK 3,100,000,000.0 in a deposit that basically reflects the remaining claims from the refinancing, which take us to my number of 5,800,000,000.0, which is basically the money that Norwegian has earned over the last years that has been used to repay, the debt in Norwegian, Gamilmuro, from the pre restructuring years. It’s a debt of honor that we now have fully honored. And that, of course, by doing this, we have we are at end of that journey.

We will then start on our next journey, basically, doing the payment of the inaugural dividend and also, of course, introduced a policy of an annual, dividends from Norwegian. The dividend today that will be paid out in August is the first ever in the history of the airline. This is quite remarkable. The airline industry, of course, has a tradition of some airlines, receiving a lot of support from governments. The Norwegian government did provide a crucial risk rescue loan to Norwegian in the pandemic.

We did not get any subsidies or support as others. We got a debt instrument. We are very grateful for that. And, of course, it helped to save Norwegian, to save the workplaces, and to save the Norwegian aviation industry. This contribution from the government has actually yielded, which is extremely rare, a positive nominal return.

Basically, government got this money back. They have were able to participate in the business upside by the effort of management through the convertible loan mechanism. They realized a profit as this was then converted and furthermore, as they sold shares in the market. They have a remaining credit position, which is now secured with a deposit of NOK 3,100,000,000.0 where they are the largest holder, that we will again, pay into a closed account in August. This was the sole state funding ever received in the company history of Norwegian, and it has now been repaid in full.

And I would like to make that crystal clear, with all the commentators that comment on government support to aviation. This marks a shift as dividend now can be delivered. We’ll have a capital structure that’s fit for purpose, basically to the call and the buyback of the convertible bond and the deposits of the outstanding amount, as I mentioned. We will then distribute the money that we set aside in the dividend fund around basically NOK 90 0.9 NOK per share in dividend. This, yeah, this will, of course, be positive in addition to the gains for the shareholders by the reduced dilution, as we bought back, some of the hybrid loans.

The payment of the dividend will happen as soon as possible, and its target is for August 2025. With that, yeah, I’ll end my part of the session and of course give the word to Guy who leads the effort. And, of course, management of Norwegian has done a tremendous job, in these years. So it’s a good also way to celebrate the effort, and I will give the word to you. Thank you, Guy.

Ger Carlesen, CEO, Norwegian: Thank you, Svan Harald, for your kind words. Good morning to everybody, also to the to the to the guys listening in online. So let’s focus on the second quarter of twenty twenty five. An EBT of NOK 1,055,000,000. EBIT of 1,250,000,000.00 divided on 1,025,000,000 for Norwegian and SEK $225,000,000 for Wiederer.

This is a significant improvement from last year on EBT, which is up SEK $577,000,000 year on year. Operating margin this quarter at 12.2%, which is up again from 6.4% last year. We are impacted by cost increases on on on several areas, especially on ATC, air traffic control fees, as well as airport tariffs throughout the network where we are flying. Despite that, we are, this quarter, guiding the cost for the full year down a step. I will come back to to the details on that.

Record Q2 unit revenue capacity growth is coming down to only 1% in the quarter compared to the same quarter last year, and the load factor is up 3% year on year. Is delivering very well, this quarter, load factor up 4%, and an all time high quarter with regards to number of passengers, close to 1,100,000 passengers. June especially, delivered well with a record monthly revenue, in the company’s ninety two years history. Operational excellence is, very important as we all know, and we are doing quite well, on that area. On time performance, 86%, up five percentage points year on year.

Regularity, 99.7%, which means that we are not canceling. We have said all the time, we have a network for sale. We will fly the network, and we will not cancel. And we will be, to a very large extent, on time. We are working on a daily basis with our customers, the passengers.

We have a so called NPS score, which is high. We are now at the 50 level, which is high regardless of who you compare us to. And we are very focused in it, and we are working very hard to even move even higher than the 50. We are the airline in The Nordics with most direct routes. And as we say in Norwegian, why connect when you can fly direct?

Corporate market share, I will come back to in more detail. We are gaining market share. And as Svan Horl said, it’s very promising to see how SPAN is developing, onboarding new partners as well as new members. And it’s and we are also on schedule when it comes to the Raittan Group getting on board. As it looks today, a couple of the brands within the Raittan Retail Group will come online and live during 2025.

We are working on the fleet and the asset side. We have, during the quarter, acquired 11 spare engines. This is the latest technology from CFM, the LEAP-1B engine that will be used on a MAX eight aircraft. Deliveries in 2027 and 2028. And this is for us to secure the capacity needed and to take down the costs on on actually, you know, having spare capacity when we have to take engines off the wing for for maintenance for years to come.

We have also, as said, purchased three additional aircraft. This is aircraft we are flying. This is aircraft where we have been, you know, we have been flying since the venue. And we are going to book a gain on that acquisition of $260,000,000 in the third quarter. If you add in the 10 aircraft that we bought in the first quarter, we are talking about the cost saving on an annual basis for years to come in the area of million a year.

Liquidity increased during the quarter close to NOK14 billion. We have financed the 10 aircraft we bought in Q1. It’s all done. It’s all finalized. It’s all completed.

And that reflects also the cash position of close to SEK 14,000,000,000. We have called and partly bought back and converted the convertible bond, as mentioned. And that’s and we are also then depositing the so called outstanding amount on the retained claim bonds, 3,100,000,000.0. That takes us into a position where we could where we can pay dividend, which we will do. And we are today declaring, 0.9 NOK per share, in dividend, that we plan to pay out to our dear shareholders in August, this year.

Traffic figures, 7,600,000 passengers, 4% up year on year. Load factor, 85.2 in Norwegian, 3.3 percentage points up. Very good to see that Wiederer is also delivering on load, 73.9%. That is four percentage points up from the same period last year. Cunctuality, 86%.

We are happy with that. We are very happy with it, actually. We were beaten by Wiederer, 89.3%, very impressive. And then on regularity, as I said, 99.7% and Wiederer also at very high levels at 96.7%. Looking at the traffic figures, I think we have been planning the high season very well when it comes to the availability of aircraft as well as availability of crews.

Now it’s all about executing the high season. And so far, it has gone very well, I say. Have As you can see on the red line there, we are still we are filling our aircraft with between 8095%. Very happy to see the 88.4% in June, followed by 1% in yield, which is kind of showing the strength in the market. And I will come back to how it looks going forward.

The yield is also up 6% year on year. Obviously, you have an effect on the Easter effect, as we call it. But we have the highest June load since the pandemic, which is really, really promising. Looking at the Vidre figures, it’s the same story really that we see in Norwegian, close to 1,100,000 passengers during the quarter, 8% up and the highest ever, very promising to see. Load factor up increased to 74%.

And as I mentioned, June record high passenger numbers as well as revenue. We are following very closely, obviously, between the two airlines, the interlining traffic or connecting traffic, the traffic that touches both airlines. That is one of the reasons we actually acquired Wiederer, and we are seeing them on an annual basis. This traffic flow has increased by close to 40%. We are we have just been taking live our new distribution platform, the new booking engines, as you all can see when you book tickets with Norwegian today.

This is also giving us the ability to interline, meaning that we can connect to We can start selling tickets on our own website, and we can offer a much better product to our passengers where we can do a seamless travel, and you can have one ticket and then travel between the two airlines. We think that this will give us an effect on traffic flows, and it’s actually a much better product as well for our customers. This is coming live during this quarter, meaning the third quarter of twenty twenty five. This is also a milestone and ends kind of the project where we are shifting out the distribution platform in Norwegian. EBIT of SEK $229,000,000 on up SEK 27,000,000 from the same period last year.

Looking at the bookings going forward. As you can see on the top left side there, you can see the blue line that shows the softening that we saw in the market last year when we entered into the May and into the rest of June before it started to pick up again. Looking at the red line, you can see that that didn’t happen this year. We were kind of a little bit worried when we came into May whether we will see the same slowdown, which we definitely did not see. And that’s how that’s why we ended up very good June, both in Norwegian and in Viedelur.

And that level has actually continued through July and for the coming months as well. This applies to the whole network really, both on travel months and on the different destinations. But again, we are coming from a quarter with 16% growth. Now in this quarter, we have only 1% growth. And now we can harvest on the investments that we have been doing, building up the capacity.

And now we can take out the full effect of it during the high season of 2025. Looking at the right side, you can see the red line, which shows the booked revenue for travel from July to October this year. You can see that we have surpassed 2024, and we have massively now surpassed what we saw in 2019. So as per today, we have sold close to 10% more tickets for travel during these months, which means that we are coming into July, August, September, October with a higher load than how it looked last year. And even more promising, we are also up on yields.

If you remember the last quarter where we stood there a few months back, we guided a flat yield for the coming months. Now we are guiding a yield that is up. So the bookings heading into the rest of the summer season and into the fall is looking very promising, I have to say. Corporate travel. When we are reading the Avinur figures, they are telling us that the corporate travel domestically in Norway is 11% below what it was in 2019.

International travel, 15% below. If you look at the graph here on right hand side, you can see that we have been growing the number of passengers in the corporate market with 22% since 2023. If we had shown the revenue increase for the same periods, the increase would have been even more. So we are for sure taking market share. We have been taking market share.

And this graph shows that we are actually keeping the market share as well. We are talking to the travel agents all the time. They are telling us, these days that the corporate market has been growing four percent ish, during 2025 so far. But they’re also telling us that Norwegian is growing more than double of that, which means again that we are taking market share. And more and more of these agents are saying that, you know, people are traveling more than 50 with Norwegian in the corporate market.

Why? Well, I think we have an attractive product. We are on time. We have the necessary frequency in our network. We have a high regularity.

And we actually have a pretty good product that is attractive and is getting even more attractive as we go. We have also been focusing a lot on the so called small and mid sized corporates. We have signed up more than 1,200 new contracts so far this year and that applies to a growth in all sales channels. Also very happy to share that we have signed up a contract with the Swedish state, so called Commerkollegiate, which is a four year contract and recover domestic travel for the next the next years in Sweden. Also, on the interlining project, the the the distribution platform will be coming online q three.

It will, for certain, give an effect. And we have also launched a product called few choice where corporates, typically large corporates, can invest into being more sustainable, where they’re actually buying SAF, sustainable aviation fuel. And we have just the last month been signing up four contracts with huge large corporates that is investing into this product. This comes on top of the contract that we have with the Norwegian defense. And I will urge other large corporates in Scandinavia and The Nordics to also invest in this.

And this is a small step in actually us being a more sustainable airline. And we are quite eager, as you all know, to be more sustainable for the months and the years to come. With that, Sandjer again.

Hans Joergen Viibstad, CFO, Norwegian: Thank you, Geit. Thank you, Sven Harel. Good morning, everyone. Great to see you here. It’s been a good quarter for Norwegian for sure, and I will go through the quarterly result in somewhat more detail.

I will also spend a little bit more time on the balance sheet as a lot of things has been happening on our balance sheet in this quarter given the buyback of the bonds and now that we’re paying the dividend and a few other things that has happened. So very happy to report a top line, increase of 10% to 10,300,000,000.0 with Vidro contributing a very nice 2% sorry, 2,000,000,000 on their strong traffic figures. The group EBIT more than doubling from Q1 last year to 1,250,000,000 with Norwegian contributing just more than 1,000,000,000. It’s actually two and a half times, the same figure, of 2024. And Beader also coming in very strongly at 229,000,000, which is up EUR 30,000,000.

They had a good second quarter also last year after but had a little bit of a struggle in the first quarter given the weather situation, etcetera. So a very, very strong quarter for both Norwegian and Wiedera, giving them an operating margin of 12.2%. Obviously, there is some benefit from the strengthening of the Norwegian kroner versus the U. S. Dollars, both on the OpEx side, but also on the translation differences on our balance sheet, which with a contribution there of 194,000,000, which is kind of a little bit outside the ordinary core business.

Also on the cost side, I think we are in control of the cost. The costs are coming in pretty much as planned with a unit cost of or CASK of 50 up 7%. And as mentioned before, the with the ATC charges and airport charges giving being by far the largest contributor to that increase. But it’s on plan and we’re overall, though working extremely hard on the cost, we’re overall quite happy with the outcome. The balance sheet, again, strong liquidity position, 13,800,000,000, the highest ever in the history of the company, a function of we successfully completed the financing of the 10 aircraft that we took delivery of in the first quarter as planned at very good terms.

But also countering that, did the buyback of the convertible bond, effectively buyback of the shares as these bonds had been converted into shares, spending 900,000,000 NOK on that for the in the quarter. And it’s really, I think, a good thing, reducing, as has been mentioned before, dilution, had the convertible bond, been actually converted into shares. So good thing for the shareholders, reducing that, that, dilution. And finally, then, paying a dividend of €9 reflecting the the dividend fund that has been set aside in 2023 and 2024 and 2022 as well, with the 2024 dividend used to repurchase of bonds, that is repurchase of effectively repurchasing of shares and the remaining part, being used to distribute dividend, including, interest on that amount. So a lot of things happening on the balance sheet, a lot of positive things happening on the balance sheet, both from the debtors point of view, but also I think from the shareholders point of view that as mentioned before, it’s a milestone day for Norwegian.

Diving a little bit more into the revenue side, very happy to see that the we have a significant yield increase of about 7% for the quarter. Load factor up about 3%, adding EUR 600,000,000, EUR $740,000,000 on the top line just from that factor. Of course, as mentioned before, there is a level of seasonality since the Easter in this quarter came in the second quarter. Last quarter, it was in the first quarter, but overall, a very solid development. And as mentioned before, in June was the kind of, in some ways, the proof of the strength of the market with a total unit revenue increase of 14 in that month alone.

So a strong development there. And that on the bridge gives revenue in Norwegian at SEK 8,400,000,000.0 and then with a strong contribution from Vidura at SEK 1,900,000,000.0 or 2,000,000,000, and then we end up with a revenue of SEK 10,300,000,000.0 for the quarter. Then on the EBIT side, a bit of the same picture. We will see the SEK $730,000,000 from this strength of the market, given the higher load factor and higher yields, which is a great figure. Then there are some other, adjustments on the top line.

Then we’re seeing that the, especially on the ATC charger, the general inflation is, of course, underlying driver for the cost, kind of reducing the EBIT by nearly EUR 300,000,000. We have cost OpEx initiatives. And then we have the OLG, which is the translation differences, and we’re ending up with a very, very strong and more than doubling of the EBIT in Norwegian at EUR 1,021,000,000.000, adding a robust result from Bidra at $229,000,000,000 and then we end up at €1,250,000,000 as a record operational result for the quarter. I will not repeat everything that has been said earlier. This is just showing all the figures in summary on the P and L, 10% increase driven by load factor and yields in particular.

We’re seeing personnel expenses stable. We had just to comment, we had some catch up in the second quarter last year during due to the pilot negotiations, but still a an as a result as expected. We’re seeing that the aviation fuel is, pretty much on par, but we have these, costs related to ETS allowances that have come down and also the staff mandate impacting the figure somewhat. We talked a lot about the airport and ATC charges going up 30 23% from last year, a significant but as expected increase, although we don’t like it at all. And it’s something we we need to address together with other airlines.

Other loss and gains, we talked about that translation differences. Obviously, a significant increase on the operating profit, more than doubling for the group as well. And finally, just a comment, we are now, for the first quarter, recording a tax expense. It’s not a cash item, but we’re starting due to the strong profitability in the business. We are recording a tax expense, of estimated to be 12% this year.

It’s a noncash item. And as many of you know, we have a significant tax loss carry forward in our balance sheet, 1,900,000,000.0. So it will take a little bit of time before we are in a cash payment position. So on the balance sheet, something’s happening. As mentioned earlier, we’ve taken a net delivery of three leased aircraft in the quarter.

We have, the cash boost from the financing of the, of the 10 aircraft, leaving us with a a cash total liquidity of 13.8, including, financial investments that are money market funds, and and highly liquid money market funds. Then I think it’s also important to note on the air traffic liability side, and that’s a really good kind of proof of the pudding that our bookings are good. They’re 10% above same level last year. That is pre bookings for the periods ahead. So we’re also seeing that in our balance sheet with the high bookings and the strong loads going into the second half.

We see that also in our balance sheet. Net interest bearing debt going down. Happy to see a number that number coming down from €5,800,000,000 to 4,900,000,000.0 in the quarter. And there have been this kind of added three aircraft and then obviously with the net proceeds from the financing of the aircraft and then of course with the buyback of the convertible bond. Again, and it’s been said a few times already, but the we’ve spent the cash wisely, I think, in a better and shareholder friendly manner by, exercising calling calling the bond, and then buying back in the 45% of the bond, thereby diluting reducing dilution by by 6%.

And we actually then use the dividend from 2024, topping that up with another SEK 300,000,000 to enable us to buy back and reduce that dilution in a good exercise together with the Norwegian government that we did in May and June. And then very, very happy and proud to announce that we are finally in a dividend position and that we’re able to pay a dividend of SEK 0.9 or SEK 90 to be paid in the August. On a direct yield basis, it’s 7% of the VWAP average weighted average share price this year. So it’s actually a pretty good yield also for those that are shareholders in Norwegian. So happy to see that.

As mentioned earlier, we have triggered then a mechanism in the loan agreement technically that has enabled us to pay this dividend where we’re depositing, 3,100,000,000.0, in a bank account. But just keep in mind that half of that will be repaid. That bond will be repaid according to its ordinary schedule in September. So it’s just half of it is just a very short interim period. So it’s very manageable given our very strong balance sheet going into the quarter and also strong balance sheet.

So just finalizing on the cash flow. We don’t need to spend a lot of time on this, but we have strong cash flow from operating activities, EUR 3,100,000,000.0. We have limited investment activities. Most of that investment activity is actually taking place in Wiedra. As planned, we have the net of all the financing activities, including the drawdown of the loans reduced by loan repayments and the buyback of the convertible bond.

And we’re coming out with SEK 12,700,000,000.0 of cash plus the financial investments, giving a net liquidity position of 13,800,000,000.0. It’s also good to note that we have with the Boeing prepayment for the deliveries. We have already paid EUR 3,100,000,000.0. So it’s very manageable, the remaining GDPs for these aircraft that will be delivered over the next few years. So happy with that.

So I think with that, overall, a very good quarter for Norwegian, strong operational performance, strong financial performance, optimizing the balance sheet and ultimately paying dividends. So quite a milestone quarter for for Norwegian, this time. Thank you.

Ger Carlesen, CEO, Norwegian: Very much, once again. So the way forward, let’s talk a little bit about the fleets in Norwegian. We have taken delivery of three aircrafts this quarter. That takes us up to six aircraft delivered during so far this year. What we are seeing with Boeing is that, they have significantly ramped up their production.

They are now in the thirties, aircraft a month, which is very promising. The last two aircraft we took delivery of actually came early, earlier than what we thought, which shows that the visibility when it comes to deliveries from Boeing is increasing massively. Very nice to see and a big complement actually to Boeing. We have our own order of 50 aircraft that is starting to deliver by the end of this year as it looks today. We also have a big upcoming decision during the next few months where we have to decide whether we declare the options for an additional 30 aircraft.

We have very attractive terms on both the fixed 50 aircraft order and even more attractive terms on the options. As we see it, the pricing for these aircraft is probably somewhere between 1015% below the markets. We have also spent some time acquiring spare engines, as mentioned, 11, and adding the two that we have already purchased earlier. We have 13 spare engines. This is to make sure that we have available engines when we need them.

When we need spare engines is when we take engines off wing for maintenance. We think there is going to be a limitation on shop capacity during the next years. And looking at the leasing market for leasing engines, that’s red hot. It’s very that means that it’s very expensive. So by acquiring our own engines, we have much more flexibility, and it’s going to be cost saving measures, for the years, to come.

When having a certain ratio of spare engines compared to the total engines you are flying, you also have some benefits towards CFM when it comes to availability of engines when you need them. So this is a move, as Van Harald mentioned, to lower the ownership cost and in addition then getting more flexibility when we need it. That also applies to the acquisition of the three aircraft, $260,000,000. But even more importantly, together with the 10 aircraft we bought in the first quarter, reducing the ownership cost with 200,000,000 between 200,000,000 and €250,000,000 a year for the years to come. We have also been financing quite a few aircraft during the last months at terms we have never seen in Norwegian before.

And this reflects the financial position and the operational performance that we have been having over the last years. When it comes to the 50 aircraft order, as we plan today, we will own a significant portion of that order ourselves. And we are talking about somewhere between 4060% ownership, and then we will use the leasing market on the other part. The market is still affected by late deliveries from the OEMs, meaning Boeing and Airbus. Even if Boeing is now ramping up the production, there is a huge backlog that it will take quite some time to get sold.

And we also have the Airbus situation where you have a massive number of 320s today on ground due to the issues with the Pratt and Whitney engines. And this would probably take at least two to three years before all this is sorted out and that capacity is coming into the market again, which again supports the yields that we are seeing today, probably longer than how it could be if we didn’t have those issues. As we all know, we had trade tensions between The U. S. And the key and the rest of the world, would say.

There is it’s very difficult to get the visibility, high visibility on that situation. We are obviously following it closely, monitoring whatever is happening. And then we will see how this could affect the airline industry, including Norwegian. A couple of words on Programme X. This quarter, we are just reconfirming the targets of obtaining a recurring profit improvement on the bottom line of more than SEK 1,000,000,000 coming out of 2026.

This is excluding the FX, the stronger Norwegian krone as we are seeing today. So this is going to improve the underlying running of the aircraft. And the baseline is then the results in Norwegian in 2024. This is going to take us up to a sustainable EBIT margin at the area where we are where we have just disclosed today. That’s the target.

What have we done so far in 2025? Well, as discussed, we have done quite a lot on the asset side. We are continuing to improve on on time performance, which is very important for the customer, but it’s also very important when it comes to the cost side of the business. We have, as mentioned, rolled out a new distribution platform, which will give us an effect on the top line. We have continued to take out synergies between us in Norwegian and We have done quite a lot on the network side.

We have merged certain support functions. Customer care is one of them, which is now run by Norwegian for both airlines. We are in the process of merging IT functions. Have done quite a lot on the technical side. We have done quite a lot on the procurement side already, the facility side.

We are also in the process of seeing what we can do even more on the seasonality side, both in Norwegian and between the two airlines. That is already giving us an effect in the numbers in Q2, and it will give us an effect also towards the end of the year. Other processes that we are in the middle of is more asset performance, fuel consumption savings. The crew and aircraft efficiency is an area where we are working on. There is room there even if we are quite good today.

We are going to do a rightsizing in Wiederre and in Norwegian and between the airlines. We are going to invest into AI to do more automation, and it will give us effects. The interlining parts, have already mentioned. I’d also like to share the news that Wiederer is also running a similar program called Focus 500, and you can all guess what the 500 means. And it is exactly what you think it is.

So we will also have effects in Wiederre as a stand alone for the months and in the years to come. We have some headwind on the cost side, as mentioned earlier, especially on the ATC and the airport tariffs. But despite that, we are, guiding this quarter the CASK ex fuel for 2025 as a whole, one step down. Last quarter, we said mid single digit increase. Now we are saying low to mid single increase on the CASK for 2025.

And then we all hope and let’s see how it ends and if we can bring it even further down. So all in all, the summer season is we are in the middle of the summer season. We are executing well. We are up on load, up on yield for the next coming months. We are guiding the cost down for the full year.

And we will pay dividend in August of NOK 0.9. I think that ends the presentation. Okay.

Jasper Hathepeit, VP of Investor Relations, Norwegian: And open for questions. If I ask those two gentlemen to stand here, we’ll have Saint Pavel join us. We can start with some questions from the audience. First

Audience Member: of all, congratulations to to Norwegian and all the team, management, and and the staff. Great result to see you going in the right direction. Two questions from me. First, airlines in Europe report changes in booking and travel patterns. More bookings closer to travel dates, and, demand in the shoulder season is increasing.

The Norwegian, see the same, you know, development. Secondly, last week news on Air France KLM to become majority owner 60.5% of SIS and the order of 45 Embraer e one nine five e two midsize aircrafts. What are your thoughts on how this can impact the competitive landscape in Scandinavia?

Ger Carlesen, CEO, Norwegian: Let’s take the first one first. We are as mentioned also again, we are seeing kind of coming into the rest of July, August, September and October with a higher load and actually now also a higher yield. That applies to all months. If you look at the booking curve, maybe it’s coming down marginally, but it’s not really very different when it comes to when you book the tickets compared to when you are traveling. If you go, let’s say, back to last summer actually, maybe a little bit, meaning you’re booking later, but not significant.

The second one, SAS. We are very used to competing with SAS. We actually like to compete with SAS, and we are competing very hard every single day. We are seeing that in certain markets. SAS lately have been very aggressive on pricing.

But that is just an ordinary business, I would say, and then it’s part of the competition. We have also seen that they have ordered 45 new aircraft, which is nice. So we don’t really know as for today where these aircraft is going to be placed. We don’t know how much this is fleet renewals and how much is growth. We do know that they are flying today wet leases from two wet lease companies.

I think it’s close to 30 aircraft in addition to the aircraft they’re flying, let’s say, with the Brau aircraft just recently done. So that adds up that that that counts up to 35 to 40 aircraft, actually. So so whether this is a fleet renewal or whether they’re going to own their own aircraft, we don’t know. We have we have some time to to consider it. This is starting to deliver, as I understand, late twenty twenty seven.

And that’s how we see it.

Sainte Harald Eiger, Chair of the Board, Norwegian: So we have three years to get even better.

Ger Carlesen, CEO, Norwegian: Exactly.

Jasper Hathepeit, VP of Investor Relations, Norwegian: Okay. We’ll then move on to some questions from the web. We’ll start with Ole Martin Basko from D and B Markets, D and B Carnegie actually. What is an appropriate payout ratio for Norwegian Air Shuttle going forward?

Sainte Harald Eiger, Chair of the Board, Norwegian: Yeah. We haven’t concluded on the dividend policy that we will apply. We will start now, and then we will we’ll take it as we go. But, yeah, I guess you can yeah. Whoever can think what could be reasonable.

Jasper Hathepeit, VP of Investor Relations, Norwegian: Right.

Sainte Harald Eiger, Chair of the Board, Norwegian: It is a relatively cash generative business in the sense that, yeah, the cash for, fleet renewal and so on is quite modest, and a has already been paid, which then, of course, could indicate a higher payout ratio.

Jasper Hathepeit, VP of Investor Relations, Norwegian: Okay. Second question from him. How do you see the competitive landscape in The Nordics?

Ger Carlesen, CEO, Norwegian: I think it’s a it’s a probably the same story as I told last quarter. It’s relatively unchanged, I would say, meaning it’s it’s it’s relatively stable. What we do see is that, you know, if we look at the the winter behind us, we saw a lot of capacity flying to It looks like that capacity is going to be more more or less the same, maybe a slight reduction. But all in all, looking at the Nordics, but stable competitive landscape.

Jasper Hathepeit, VP of Investor Relations, Norwegian: Okay. Last question from him. Has there been any wet lease cost in Q2? And what do you expect there for Q3?

Hans Joergen Viibstad, CFO, Norwegian: The wet lease cost has been 57,000,000 for the quarter. We are these are planned wet leases, though there is no kind of sudden unexpected events, though this has been planned for a while. We will have a couple of wet leases just through the summer, and then we will let them go. So no surprises in that. Okay.

Jasper Hathepeit, VP of Investor Relations, Norwegian: Then we move on to questions from Andrew Lobbenberg from Barclays. First question in terms of aircraft deliveries. How do you see the risk of tariffs for the upcoming deliveries?

Ger Carlesen, CEO, Norwegian: I think the visibility on potential tariffs is very difficult. We are following it, as mentioned, very closely. You have a situation where you have the Boeing producing aircraft in The U. S, you have Airbus producing also aircraft in The U. S.

So we just have to follow the situation and then see how it turns out.

Jasper Hathepeit, VP of Investor Relations, Norwegian: Okay. And next question from Mim. With the current strength in the NOK, are you utilizing the strength to kind of add on to your hedges as this, call it, the NOK strengthens further?

Hans Joergen Viibstad, CFO, Norwegian: Yes. We have spent this first half doing some hedges. So we are reasonably well hedged into the second half, and we are continuously monitoring that. As we’re also doing the fuel hedges, we have a very, I think, balanced fuel hedge combined with FX hedging position at the moment. So we are we have a significant exposure, but still our exposure on the NOK U.

S. Dollar portion is between 4050% hedged and the remaining part unhedged, which we find to be in a very balanced manner. Okay.

Jasper Hathepeit, VP of Investor Relations, Norwegian: Final question from Lobbenberg. When are your next labor talks, Talking about pilots, cabin, maintenance, what color

Ger Carlesen, CEO, Norwegian: can you share

Jasper Hathepeit, VP of Investor Relations, Norwegian: on the current labor talks?

Ger Carlesen, CEO, Norwegian: I see for the peak season that we are in the middle of, there is no risk of any strikes, if that’s the question. We have two negotiations that we will enter into and continue during the fall of this year.

Jasper Hathepeit, VP of Investor Relations, Norwegian: I’ll ask if there’s any other questions from the audience. There does not seem to be any, so we’ll conclude the session. Thank you very much. Thank you.

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