Norwegian forecasts improved financial performance, EUR200m cost savings in 2019

    Norwegian Air Shuttle provided (24-Dec-2018) the following year end update to the financial market:

    • The company made several changes to its network and adjusted capacity in response to “the competitive environment in a period with seasonally lower demand in Europe”. The company said the measures should improve financial performance from the start of 2019;
    • The company launched an “extensive” cost savings programme, which will contribute to estimated minimum savings of NOK2 billion (EUR201 million) in 2019. The company identified “significant savings” in the first six weeks of the programme;
    • Norwegian’s long haul operations were disrupted by challenges with the Rolls-Royce engines powering its Boeing 787 aircraft. The company reached an agreement with Rolls-Royce “which will have a positive effect” from 1Q2019. The terms of the agreement are confidential;
    • The company secured financing for all aircraft deliveries for 1H2019, including refinancing of one delivered 787, resulting in a positive liquidity effect of NOK275 million (EUR27.6 million) in Dec-2018;
    • The process of divesting aircraft continues and the company reported “significant interest in our existing fleet as well as future deliveries”. The company recently signed a LoI for the sale of two aircraft for delivery in 1Q2019. Discussions on forming a JV for aircraft ownership continue “with full force”.