Norwegian Air

Another cost-based miss in Q3; growth continues unabated

  • Sectors : Airlines & Other Transport
  • Companies : Norwegian Air

Ratings and price correct at time of issue.

  • Norwegian Air

    Closing Price: 23900

  • RATING 01/09/15

  • PREVIOUS RATING 22/01/15

    UNDERPERFORM

DAVY VIEW

Norwegian has suffered a Q3 miss (clean EBITDA: NOK1,505m versus consensus: NOK1,904m) based on another disappointing costs performance (ex-fuel CASK +9% constant currency (ccy)). The theme of cost-based misses has become a somewhat recurring one at Norwegian (we need only recall Q2 for a similar dynamic). While the company’s rapid growth levels (+25% capacity this year, c.+32% in 2018) inevitably incur added costs ahead of the realised revenue benefits (particularly in added staffing/training), the market still requires evidence that it can actually leverage increasing scale to achieve comparative cost benefits.

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Oct 26 2017, 08:18 IST/BST

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