Norwegian Air Shuttle 2Q2015 back to operating profit. Long haul load factor 91%; leasing draws near

Norwegian's 2Q2015 results show further positive momentum after FY2014's slump into losses. Not only did unit revenue grow, driven by a sharp increase in passenger load factor, but also unit cost fell.

However, the fall in unit cost (and more than half of the improvement in operating profit versus 2Q2014) was due to lower fuel prices. Norwegian's ex fuel unit costs have risen year on year for the past three quarters. The current quarter, 3Q2015, will be the key to FY2015 results and Norwegian's management appear comfortable with booking trends and the yield outlook.

Norwegian also gave data on its long haul network, two years after its launch. Passenger numbers in 2Q2015 more than doubled from 2Q2014 and the long haul load factor was 91% in 1H2015. Norwegian must now prove its claim that this part of the business can make a positive contribution to profits. And it has no time to relax: its next new business, aircraft leasing, will be fully operational in 2016, when it plans to lease out all four A320neo aircraft due from Airbus.