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UPDATE 1-Norwegian Air's December capacity down, boosting earnings

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OSLO, Jan 7 (Reuters) - Norwegian Air cut its capacity for a third consecutive month in December, removing loss-making routes as part of its plan to regain profitability, the budget carrier's traffic data showed on Tuesday.

Norwegian has shaken up the transatlantic travel market with low fares, but breakneck expansion and the forced grounding of its Boeing 737 MAX fleet also brought mounting debts and losses.

The airline has raised funds from investors three times in 20 months to prevent it from joining the ranks of airlines that have collapsed due to industry overcapacity.

Overall capacity, a measure of distance flown and the number of seats available (ASK), fell 25% year on year in December, while analysts in a Reuters poll had on average expected a 24% drop.

But the airline's yield - income per passenger carried and kilometer flown - rose 14% to 0.43 Norwegian crown ($0.0489), beating a 0.41 crown forecast.

The airline on average filled 83.5% of seats in December, up from a load factor of 78.6% in the final month of 2018 and beating an average forecast of 82.4%.

"The ticket sales for the next months ahead are looking good, both for business and leisure travelers," newly appointed Chief Executive Jacob Schram said in a statement. ($1 = 8.7955 Norwegian crowns) (Reporting by Terje Solsvik, editing by Gwladys Fouche and Louise Heavens)