DAVY VIEW

Norwegian Air has reported an operating loss (EBIT) of NOK220m for Q1 (consensus operating loss NOK954m). Reduced capacity (ASKs) -6%, higher load factors and yield led to unit revenues up 13% with limited cost inflation (unit cost ex-fuel +2%) – driving the consensus beat and significant improvement in winter losses. Going forward, ASKs are expected to be +5% in Q2 and +3% for the full year. The company is 45% hedged for jet fuel for the year, leaving it partially exposed to current elevated jet price levels. While Norwegian has said that it sees strong demand for leisure routes and has increased fares to compensate, we do not expect all the jet fuel price increase to be recovered and will revise our estimates accordingly. Consensus FY26 EBIT is NOK2784m (Davy: NOK3026m).