DAVY VIEW

Norwegian Air has reported a headline EBIT of NOK -603m (consensus NOK -517m), including a NOK 733m charge relating to the EU court case on ETS allowances. Underlying profit of NOK 213m excluding losses was impacted by the Middle East crisis, with fuel costs up 33% year-on-year (yoy), while demand was affected and unit revenues were down 5%. Underlying cost performance was positive with ex-fuel costs down 5% as ‘Program X’ continues to deliver. Looking ahead, booking momentum has improved from June with ticket sales ahead of last year for July to October travel with flat yields on sold tickets (some currency effects). Capacity for Q3 is +5%. Full year cost guidance is unchanged versus the prior year. Consensus for FY26 is NOK 2,033m. The acquisition of Nordic Leisure Travel Group (NLTG) is expected to close in Q4 2026, and synergies are likely to drive a 2% operating margin increase in 2027.