Scandinavian carrier Norwegian Air reported slightly weaker-than-expected quarterly earnings Thursday, citing rising fuel costs, a strengthening dollar and stiff competition.
The fast-growing budget airline posted 1.6 billion Norwegian crowns ($191 million) in pre-tax profit for the period ending Sept 30. Analysts polled by Reuters had been expecting third-quarter net income to come in at around 1.74 billion crowns.
Here are the key takeaways:
- Third-quarter pre-tax profit came in at 1.6 billion Norwegian crowns, compared to 1.74 billion crowns expected from analysts polled by Reuters.
- Third-quarter net profit of 1.3 billion Norwegian crowns, in line with analyst expectations.
- Approximately 11 million passengers chose to travel with Norwegian Air in the third quarter.
In a statement, Norwegian Air CEO Bjorn Kjos said the airline's rapid growth would need to slow down over the coming years. This in turn should allow the company's shareholders, investors and employees to reap the benefit of investments, he said.
"I am very pleased to present a solid result this quarter with reduced unit cost despite strong growth," Kjos said.
"However, there is no doubt that tough competition, high oil prices and a strong dollar will affect the entire aviation industry, making it even more important to further streamline our operations and continue to reduce costs."
'No root in reality'
Europe's third-largest budget airline by passenger numbers has sustained mounting debts and losses in recent months, prompting some industry figures to predict the company could be on the brink of collapse.
Last month, Ryanair CEO Michael O'Leary told reporters at a briefing in Dublin that it was "just a matter of time" before Norwegian Air went bust. In response, the company said O'Leary's comments had "no root in reality."
Norwegian Air is trying to crack the transatlantic market by undercutting established rivals, but has faced intense pressure to control costs and shore up its balance sheet amid stiff competition.
Earlier in the year, the company rebuffed takeover advances by British Airways parent firm IAG. The company told investors it was too early to sell. Shares of Norwegian Air are up more than 5 percent year-to-date.