Norwegian Air Narrows Loss, Still Working on Cost of 737 Crisis

(Bloomberg) -- Norwegian Air ASA reported a lower first-quarter loss as it cut staff costs and scrapped less-profitable routes, while saying it’s continuing to evaluate the impact of the grounding of its Boeing Co. 737 jetliners.

  • The discount carrier has had some “productive meetings” with Boeing on how to “maneuver through” the 737 situation, Chief Executive Officer Bjorn Kjos said a statement Thursday.

Key Insights

  • Norwegian Air suspended operations with its 18 Max 8s in March after the global fleet was idled by regulators following two crashes linked to a fault with the model’s anti-stall system. That makes it the most vulnerable carrier in Europe to the 737 crisis. Kjos said the company is “currently assessing” the financial impact of the grounding.
  • Norwegian said late Wednesday that it had struck a deal with Boeing and Airbus SE on further changes to its aircraft-delivery schedule that will cut capital spending by $670 million over two years. The carrier has already delayed earlier deliveries.
  • The three-month loss before interest and tax declined by more than a third from a year earlier, though was slightly worse than the average estimate of analysts.

Market reaction

  • Norwegian Air shares have slumped 61 percent this year, losing more than one-fifth of their value when British Airways owner IAG SA said in January that it was no longer interested in buying the Scandinavian carrier.

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