Friday , May 14 2021

Analyst: – Norway must make more adherences

The Norwegian general director, Bjørn Kjos, hopes to triple when the cold is fixed.

"We are now entering a period characterized by generally low demand, tough competition and high oil prices, which makes it even more important to continue working to reduce company costs," says Kjos in a press release.

The low cost carriers of Kjos have just released new traffic figures for October. Growth continues as expected, while revenues fell in October compared to October last year.

Revenues fall

If the revenue falls on revenue, it means that the revenue of the ticket will be lower and may affect the profit in Norwegian.

  • In October, revenues per passenger per kilometer (yield) fell two percent to NOK 0.38, compared to the same month last year.
  • Another income objective, RASK (rent per seat per kilometer), fell five percent to 0.33 crowns.

"The figures presented were a little on the weak side, especially the degree of filling fell. Performance also fell short of expectations, but it seems that the company adjusts prices at the cost of filling the plane. The challenge for the Norwegian is that they delivered figures below 2017, while costs increase significantly with higher oil prices and stronger deficits, says Sivertsen.

He claims that Pareto is not happy that prices are below the figures for 2017

"There was no celebration in the fourth quarter of last year and the November figures indicate that the result will be even lower this year. We also see that the demand for short-haul flights is weak and it reserves ahead of us to assume that this will continue for a time, "says Sivertsen.

"It's very thin"

For airlines, the spring and summer months are the period during which the money will be won before it happens against tougher times during the winter period. For a long time, the Norwegian had a low and high capital debt, but last week, Norwegian earned half a billion fresh money after selling five planes.

"It seems the company is going to a tough and hard winter. Something that will affect the entire aviation industry. Norwegians may have to do more, including continuing to sell planes, thus reducing the number of lost routes, which in turn can withstand The heritage of the book, says Sivertsen.

In March, the Norwegian took the 1.3 billion to meet the loan conditions of the company, indicating that the company must have a net book value of at least 1,500 million.

– Based on the estimates of Pareto, the equity of the books will be around NOK 1.6 million in the first quarter of 2019. In fact, the loan requirement is 1,500 million. In addition, there is a loss registered in Norwegian Finans Holding, if it does not increase significantly during the year, and a loss of fuel insurance of NOK 228 million, says Sivertsen.

– If Norway violates the terms of the loan, it must adapt to the situation it adds.

The analyst says the losses must now be reduced.

"The Norwegian said they will reduce costs by two billion crowns next year, as well as improving regularity to avoid a billion additional costs by 2019. If the company is ready they are on the way, but with heavy winters, we must Do it fast and that is what is uncertain if they are achieved, says Sivertsen.

Strong bag this year

The price of Norwegian shares was turbulent this year, mainly due to IAG's desire by the British airline to buy the Norwegian giant at low cost. In several rounds, IAG made an offer for Norwegian, but failed.

So far this year, the stock increased by 29 percent in Oslo Børs.

"The figures do not mean that the stock will fall today, on the contrary. There is probably something down.

The last impulse occurred after the Norwegian data was published for the third quarter. It was as expected a million surpluses, but the Norwegian also transmitted a plan for possible cooperation with a financial player to split much of the aircraft into a shared company.

"It ensures the financing of both the loans we pay and the new aircraft. It is such a strong player that none of it will disturb the problems in obtaining financing," said Kjos in relation to the presentation of the results.(Conditions)Copyright Dagens Næringsliv AS and / or our suppliers. We want you to share our articles using a link that leads directly to our pages. The copy or any other form of use of all or part of the content may only be in writing or permitted by law. For more terms, check here.

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