The budget carrier said a series of “unforeseen challenges”, including tough competition, high fuel costs and issues with the Rolls Royce engines on its Dreamliners, had negatively impacted its results.
However, in a full-year trading update issued on Thursday morning (February 7), the airline said measures to address its financial stability would return the carrier to profitability this year.
These include optimising its bases and route structure, divesting aircraft, postponing aircraft delivery and internal cost reduction.
“We have taken a series of initiatives to improve profitability by reducing cost and increasing revenue going forward… which will boost our financials and bring us back to profitability,” said Norwegian chief executive Bjorn Kjos.
“Going into 2019, we will enter a period of slower growth and fewer investments, while constantly looking for new and smarter ways to improve our efficiency and offer new products and services to attract new customers.”
Norwegian’s full-year net loss was NOK 1.454 billion (£131.4 million), albeit a 19% reduction compared with 2017 when its net loss came in at NOK 1.794 billion (162.3 million).
Its full-year Ebitdar (earnings before interest, taxes, depreciation, amortisation, and restructuring or rent) came in at NOK 2.171 billion (£196.4 million), down 45% from NOK 3.949 billion (£357.3 million) last year.
Operating revenue, though, increased 30% from NOK 30.948 billion (£2.8 billion) to NOK 40.266 billion (£3.643 billion).
Norwegian carried 37.34 million passengers last year, up 13% from 33.15 million on a load factor of 85.8%, down 1.7% from 87.5%.
This, though, came against an increase in capacity of 37% last year with the addition of 25 new aircraft to its fleet. Kjos confirmed the airline anticipated more modest capacity growth of 9% during 2019 due to continued divestment of its Boeing 737-800 in favour of more efficient 737 MAX aircraft on its short-haul routes and 787-9s on long-haul.
Norwegian will take five new 787-9s this year and 16 of Boeing’s 737 MAX aircraft.
"Norwegian’s long-haul growth rate will significantly drop in 2019, with only five new deliveries entering the fleet, and total fleet at year end 2019 is expected to be 37," said Kjos.
"While long-haul continues to grow in 2019, we will reduce Norwegian’s short-haul operations and close four bases in the Mediterranean, reallocating some of the aircraft to strengthen the core Nordic markets."
Norwegian’s financial travails intensified during Q4; the airline’s shares twice tumbled off the back of a preliminary results announcement, followed by confirmation that British Airways owner IAG would not pursue a bid for Norwegian and would divest the 4.61% shareholding it took in April last year with a view to a full bid.
It has already outlined the closure of four short-haul bases – Palma, Gran Canaria, Tenerife and Rome – and two long-haul – New York Stewart, Providence Rhode Island.
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