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Norwegian posts first loss in seven years

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Norwegian blames loss on fuel costs and flight delays
Low-cost airline Norwegian has fallen into the red for the first time in seven years, blaming it on costs from fuel hedging and flight delays on long-haul routes.
The carrier posted a loss of over a billion Norwegian kroner (€115 million) for 2014, compared to a profit of €37 million during 2013. The dramatic loss came despite revenues rising 25% to €2.3 billion last year and passenger numbers rising 16% year-on-year, as the airline expanded its long-haul operations.
Norwegian’s loss was caused by a fuel hedging bill of over €50 million in 2014 as the airline paid in advance for this year’s jet fuel requirements. The airline pointed out that “major costs for 2015 have already been covered”.
The carrier also admitted that delays to long-haul flights had cost the company another €31 million in 2014. The weakness in the value of the Norwegian currency also had a negative effect.
“There is no denying that 2014 has been a weak year for Norwegian,” chief executive Bjorn Kos said. “Last year was characterised by continued international expansion, not least the launch of new long-haul routes. Entering 2015, we see a satisfactory demand for quality flights at affordable fares and are already in the first quarter benefiting from the low oil price. Still, there is no doubt that we need to further reduce our cost level in order to stay competitive in a very challenging market.”
TTG Digital / The Local
[photo courtesy Norwegian]

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