Shares in Norwegian fall as margins are hit

Airline blames price competition with other airlines

Shares in Norwegian have fallen since the company revealed yesterday that growing competition had pushed down yields by 21% in February year-on-year. Shares immediately fell 5.5% but rebounded, to just over 1% down by early afternoon.

Founder and chief executive Bjørn Kjos blamed the airline’s falling profitability on price competition with other airlines.

The airline stressed that 22% more passengers – 1,527,099 of them – flew Norwegian in February, as the effect of long-haul flights to Thailand and the US is felt.

It is due to take delivery of four more new 787 Dreamliners during the first half of 2014 to boost its long-haul fleet and 15 new 737-800 aircraft.

“There’s strong competition in the market and many affordable tickets available, which benefits the customers,” he said in a statement. “At Norwegian, we are prepared to meet the competition by introducing even more brand new aircraft to the fleet, expanding the route network and adding new destinations to the route map. New aircraft with lower fuel burn is key to keeping costs down and continue to offer more low-fare tickets.”

The Local

[photo courtesy Norwegian]

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