DAVY VIEW

Norwegian has successfully navigated a difficult Q1, likely prompting modest upgrades that will reverse the FX- and strike-related downgrades through the year-to-date. It is also encouraging that its long-haul operations have good momentum and that bookings have returned following the strike. However, our long-term structural concerns – that the capacity growth to come will be difficult to absorb with a lack of competitive advantages and that leverage is by far the highest in the sector – remain. In addition, the equity ratio has now fallen to just 7% (from 9% at end-2014 and 24% on average from 2005-2013).