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12-Jul-2019 10:17 AM

Norwegian Air reports competition and travel demand affects 2Q2019 performance

Norwegian Air reported (11-Jul-2019) the following external influences contributed to its 2Q2019 performance:  

  • The airline industry is undergoing "a challenging time" due to strong competition;
  • Future demand is dependent on sustained consumer and business confidence in the company's key markets;
  • Capacity growth exceeding market growth will increase the risk of yield pressure;
  • Demand for airline travel and the company's business are subject to strong seasonal variations;  
  • The final outcome of Brexit is still uncertain. The company has contingency plans in place based on the different Brexit scenarios, including a hard Brexit;
  • Financial impacts due to the grounding of its 18 Boeing 737 MAX aircraft, with further deliveries put on hold; 
  • The company is exposed to liquidity risk, including commitments for future aircraft deliveries and lease commitments;
  • Sudden and significant changes in fuel price and foreign exchange rates could "significantly affect" fuel and other costs as well as debt and assets denominated in foreign currency;
  • In the event of industrial actions, operations may be disrupted, causing inconvenience for passengers and affect financial performance;
  • Norwegian has a substantial investment in Norwegian Finans Holding ASA and changes to the valuation of the shares might have a substantial positive or negative effect on the company's equity. [more - original PR]

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