Norwegian Air Shuttle's record 1Q loss: fighter pilot, lawyer, novelist needed?

Norwegian has had a challenging start to 2014. It has announced a record first quarter loss, as unit revenues plunged on the back of 48% ASK growth and unit cost cuts failed to keep pace. The loss was exacerbated by additional costs associated with the launch of long-haul operations and by currency movements.

It also faces strategic hurdles. Delays by the US Department of Transportation in granting a foreign carrier permit to its Irish subsidiary Norwegian Air International cast some uncertainty over its long-haul expansion. In addition, Norwegian faces possible strike action from Scandinavian cabin crew over new labour contracts, which it plans to transfer to new subsidiary companies.

Norwegian's low-cost model, and its long-haul application, demand innovative paths to grow without being tied to Norway's high labour cost environment. It has identified such paths, but innovation often provokes resistance. CEO Bjorn Kjos will need to draw on all his experience as a fighter pilot, lawyer and novelist to find the resilience, cunning and imagination needed to meet 2014's continuing challenges.