Peppo-PMO
19-04-2013, 05:49
Norwegian Air Shuttle wants more planes as growth takes off
Stock hits all time high; up 146 pct in one year
Q1 profit beat all expectations
Wants to buy more planes after a massive order last year
Thu Apr 18, 2013
OSLO, April 18 (Reuters) - Norwegian Air Shuttle said it wants to buy more planes after a massive order last year to drive its fast growing business as it takes away market share from SAS and takes on the UK budget airlines.
The low-cost airline, which booked Europe's biggest ever aircraft order last year with the purchase of 222 short-haul jets from Boeing and Airbus, said tight manufacturing capacity was a key constraint for new orders.
Shares in the 10-year old airline jumped 15 percent on Thursday to a record high after Norwegian beat expectations with a 69 million crown ($11.91 million) operating profit in the first quarter compared with a 575 million loss a year ago.
"We'd like to get more planes but it's impossible. Factories are overbooked," said Chief Executive Bjoern Kjos, who is also the biggest shareholder in Norwegian. "Thank god we booked our order (last year). A lot of big U.S. airlines have ageing fleets and I just don't see how they'll manage to renew them before 2020."
Norwegian, which offers free Wifi and comfortable legroom in mostly brand new planes, is quickly taking away market share from established carriers such as SAS. It said its new routes, particularly between Britain and the Mediterranean, had exceeded its expectations.
The solid revenue figure bode well for the firm as it expands the fleet to 84 jets this year from 68 at the end of 2012, opens another base in Spain, launches long haul routes to Asia and North America, and continues to grow traffic from Britain to popular holiday destinations.
"Given full order books at Boeing and Airbus, Norwegian will continue to prosper and gain market share thanks to the extensive fleet expansion," Swedbank said in a note to clients.
"The launch of the two new hubs in UK and Spain has been a success," it added. "The potential traffic flows from these hubs are significant."
Besides its traditional Nordic hubs, the airline operates bases at London's Gatwick Airport - a major hub for UK budget airlines such as Easyjet and Ryanair - Malaga, Las Palmas and Alicante. It will open a new base in Tenerife later this year.
Norwegian outperformed even the most optimistic expectations for the first quarter, traditionally the weakest in the industry. Average forecast for the first quarter was for an operating loss of 65 million crowns.
Analysts also applauded the firm for cutting its costs. Cost per seat kilometre fell to 0.47 crowns from 0.50 a year ago as it flew more planes on longer legs while traffic, measured by revenue passenger kilometres, rose 19 percent, putting it on track to meet its full-year guidance of between 0.42 and 0.43.
The firm is one of the fastest growing airlines in the world, easily outpacing Ryanair and EasyJet, which are recording low single digit traffic growth.
Shares in Norwegian have surged 146 percent over the past 12 months, beating a 43 percent rise in Ryanair and even a 133 percent increase in EasyJet. ($1 = 5.7933 Norwegian krones)
http://www.reuters.com/article/2013/04/18/norwegian-results-idUSL5N0D50T120130418
Stock hits all time high; up 146 pct in one year
Q1 profit beat all expectations
Wants to buy more planes after a massive order last year
Thu Apr 18, 2013
OSLO, April 18 (Reuters) - Norwegian Air Shuttle said it wants to buy more planes after a massive order last year to drive its fast growing business as it takes away market share from SAS and takes on the UK budget airlines.
The low-cost airline, which booked Europe's biggest ever aircraft order last year with the purchase of 222 short-haul jets from Boeing and Airbus, said tight manufacturing capacity was a key constraint for new orders.
Shares in the 10-year old airline jumped 15 percent on Thursday to a record high after Norwegian beat expectations with a 69 million crown ($11.91 million) operating profit in the first quarter compared with a 575 million loss a year ago.
"We'd like to get more planes but it's impossible. Factories are overbooked," said Chief Executive Bjoern Kjos, who is also the biggest shareholder in Norwegian. "Thank god we booked our order (last year). A lot of big U.S. airlines have ageing fleets and I just don't see how they'll manage to renew them before 2020."
Norwegian, which offers free Wifi and comfortable legroom in mostly brand new planes, is quickly taking away market share from established carriers such as SAS. It said its new routes, particularly between Britain and the Mediterranean, had exceeded its expectations.
The solid revenue figure bode well for the firm as it expands the fleet to 84 jets this year from 68 at the end of 2012, opens another base in Spain, launches long haul routes to Asia and North America, and continues to grow traffic from Britain to popular holiday destinations.
"Given full order books at Boeing and Airbus, Norwegian will continue to prosper and gain market share thanks to the extensive fleet expansion," Swedbank said in a note to clients.
"The launch of the two new hubs in UK and Spain has been a success," it added. "The potential traffic flows from these hubs are significant."
Besides its traditional Nordic hubs, the airline operates bases at London's Gatwick Airport - a major hub for UK budget airlines such as Easyjet and Ryanair - Malaga, Las Palmas and Alicante. It will open a new base in Tenerife later this year.
Norwegian outperformed even the most optimistic expectations for the first quarter, traditionally the weakest in the industry. Average forecast for the first quarter was for an operating loss of 65 million crowns.
Analysts also applauded the firm for cutting its costs. Cost per seat kilometre fell to 0.47 crowns from 0.50 a year ago as it flew more planes on longer legs while traffic, measured by revenue passenger kilometres, rose 19 percent, putting it on track to meet its full-year guidance of between 0.42 and 0.43.
The firm is one of the fastest growing airlines in the world, easily outpacing Ryanair and EasyJet, which are recording low single digit traffic growth.
Shares in Norwegian have surged 146 percent over the past 12 months, beating a 43 percent rise in Ryanair and even a 133 percent increase in EasyJet. ($1 = 5.7933 Norwegian krones)
http://www.reuters.com/article/2013/04/18/norwegian-results-idUSL5N0D50T120130418