Norwegian Sees $58 Million in Extra Costs From Boeing 737 Grounding
25 April 2019 - 10:15PM
Dow Jones News
By Dominic Chopping
Norwegian Air Shuttle ASA (NAS.OS) said Thursday that it sees
around 500 million Norwegian kroner ($58.1 million) in extra costs
this year from the grounding of its 18 Boeing 737 MAX 8 aircraft,
as it posted a wider first-quarter net loss.
"We have had some productive meetings with Boeing where we have
discussed how we can maneuver through the difficulties the MAX
situation is causing Norwegian," Chief Executive Bjorn Kjos
said.
The low-cost carrier said demand has been satisfactory entering
the second quarter of 2019 and although advance bookings have been
acceptable, they have decreased slightly due to the 737 MAX 8
grounding.
Norwegian widened its production growth guidance to 5%-10% in
2019 from 9% previously.
Late Wednesday, it said it had secured a deal with Boeing Co.
(BA) to postpone the delivery of 14 of the aircraft that were
originally due for delivery in 2020 and 2021. Meanwhile, Norwegian
has also reached an agreement with Airbus SE (AIR.FR) to
restructure the delivery schedule of their aircraft.
Together the deals will reduce Norwegian's capital expenditure
for 2019 and 2020 by $2.1 billion.
The net loss in the period was NOK1.48 billion compared with a
loss of NOK46 million a year earlier on revenue that rose 14% to
NOK6.3 billion.
Norwegian carried 8.12 million passengers during the quarter
compared with 7.48 million a year earlier, it said.
Write to Dominic Chopping at dominic.chopping@wsj.com;
@domchopping @WSJNordics
(END) Dow Jones Newswires
April 25, 2019 08:00 ET (12:00 GMT)
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