Norwegian Air

Long haul low cost can only work if it is actually low cost

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

Ratings and price correct at time of issue.

  • Norwegian Air

    Closing Price: 16800

  • RATING 01/09/15

  • PREVIOUS RATING 22/01/15

    UNDERPERFORM

DAVY VIEW

We believe Norwegian is targeting a potentially profitable niche, namely leisure oriented, high density, long haul low cost from major European cities. However, for capital providers (debt, equity and leasing) to retain confidence in the Norwegian version of this, there needs to be an improving cost trajectory through H2 2018. Should Norwegian show that its cost of production can be compelling (revenue optimisation was always going to be back-end weighted), which is no easy task, then it is game on. We set a new price target of NOK155 and retain our ‘Neutral’ rating.

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Apr 3 2018, 07:25 IST/BST

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