Norwegian has announced its fourth quarter (Q4) and preliminary full-year results for 2023. The figures confirm that the Oslo-based carrier has turned its fortunes around since the pandemic and is now trading profitably. The airline also expects this situation to continue into 2024 and is actively preparing for a busy summer season ahead.
For the full year of 2023, Norwegian delivered an operating profit (EBIT) of NOK 2,232 million ($212 million), the highest operating profit in the company’s history. The liquidity position improved through the quarter to NOK 9.5 billion at year-end. The figures demonstrate Norwegian’s ability to deliver strong results by reducing capacity when moving into the quieter winter period. The airline remained among the best carriers in Europe in terms of punctuality and regularity.
Across 2023 its operating margin was 9%, which is also a record high for the company. For Q4 2023, the company delivered an operating profit (EBIT) of NOK 328 million ($31 million). Profit before tax (EBT) amounted to NOK 1,804 million ($171 million) for the full year of 2023 and NOK 208 million ($19.8 million) for Q4.
At the end of 2023, the Norwegian fleet comprised 87 aircraft, of which 67 were Boeing 737-800s and 20 were 737 MAX 8 aircraft.
“I am thrilled to announce that Norwegian achieved all-time high profits for 2023. Our loyal customer base continued to grow, and we are grateful for their trust in us,” said Geir Karlsen, CEO of Norwegian. “Colleagues across the entire company have worked tirelessly to ensure operational excellence, ranging from the planning of our network and services to everyday execution,” he added.
Norwegian carried 4.7 million passengers in Q4, up from 4.6 million passengers in Q4 2022. Capacity, measured in Available Seat Kilometres (ASKs), was 7.1 billion seat kilometers, while revenue passenger traffic (RPKs) was six billion seat kilometers. Compared to the previous quarter capacity was down 32%, as the carrier reduced overall capacity to match seasonally lower demand during the northern winter period.
The Q4 network load factor was 84.4% percent, up three percentage points from the same period the previous year.
Punctuality, in terms of the share of flights departing on schedule, was 81.5% in Q4, down slightly from 82.3% in the same period the previous year. Notably, punctuality fell in December as winter weather conditions impacted operational performance at certain Norwegian hub airports. Global aviation consultancy Cirium named Norwegian as Europe’s most on-time airline in October 2023 and the fifth most punctual airline for the full year.
Widerøe acquisition completed
In January 2024, Norwegian completed the acquisition of Widerøe, a regional carrier in Norway with a fleet of 48 aircraft, predominately turboprops. The acquisition of Widerøe will facilitate the linking of the two carrier’s complementary route networks. According to Norwegian, this move will “create significant operational synergies and provide Norwegian with additional diversification through Widerøe’s substantial public service obligation (PSO) operations.”
Karlsen said: “We are now in the process of onboarding Widerøe as part of the Norwegian group. I very much look forward to exchanging decades of experience between the two airlines. This will enable us to go to the market with an improved and more comprehensive offering to our customers.”
2024 outlook
According to the carrier, its forward bookings for 2024 are encouraging. For the full year of 2024, Norwegian forecasts an overall capacity of around 36,000 million ASKs, which corresponds to a growth of approximately 12% throughout 2023. The company projects profits for 2024 to improve and is currently expecting an operating profit to be in the range of NOK 2.5 to 3.2 billion ($23-30 million for the year.
For the remainder of the 2023/24 winter season, Norwegian’s strategy is to maintain a reduced capacity level that matches the seasonally lower demand to ensure that profitability is protected. From March 2024 onwards, the company will be aiming to increase overall capacity into the busy summer 2024 season, expanding its fleet to around 90 aircraft.