Norwegian Air (NAS.OL) shares surged on Friday following its report of operating earnings that surpassed forecasts in the fourth quarter, propelling its full-year outcome to an unprecedented high.
The company anticipates achieving a new profit record this year.
This achievement signifies a remarkable turnaround for the budget airline, which faced the possibility of grounding just a few years ago due to substantial debts compounded by the pandemic.
Once prominent in transatlantic flights, Norwegian now concentrates on its core Nordic market.
Despite the fourth quarter typically being a sluggish period for holiday travel in the northern hemisphere, Norwegian raised its earnings projection for 2023 owing to robust demand in the final months of the year.
Shares of the company rose by 13% at 0956 GMT on the Oslo benchmark index (.OSEBX), reflecting a 0.7% increase, and marking a 43% surge over the past year.
The carrier’s operating profit for October to December amounted to 328 million crowns ($31.08 million), surpassing the 177 million forecast in an analyst poll conducted by the company. This starkly contrasts with the 39 million loss recorded a year earlier.
Sydbank analyst Jacob Pedersen remarked, “It proves that the earnings recovery Norwegian has been through … they can still deliver record numbers, even though they fly significantly less than they used to.”
Norwegian disclosed a rise in passenger numbers for the fourth quarter to 4.7 million from 4.6 million a year ago.
It anticipates a 12% increase in capacity measured by available seat kilometres (ASK) this year, with an expected operating profit for 2024 ranging between 2.5 billion and 3.2 billion crowns, up from 2.2 billion crowns in 2023.
CEO Geir Karlsen expressed optimism regarding booking momentum for the upcoming summer, although he cautioned about rising costs due to inflation, a weak Norwegian crown currency, and escalating airport fees across Europe.
The airline prioritises cost management in the foreseeable future.
Norwegian’s Nordic competitor SAS (SAS.ST) recently projected revenues exceeding 48 billion Swedish crowns for 2024 and