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.

To contact the reporter on this story: Lucca de Paoli in London at gdepaoli1@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Christopher Jasper

©2019 Bloomberg L.P.