Norwegian Points to Max Groundings for Traffic Dip

 - July 4, 2019, 10:27 AM
Norwegian Air Shuttle is one of many operators worldwide disrupted by the continued grounding of the Boeing 737 Max narrowbody airliner.

Norwegian Air Shuttle on Thursday reported that the on-going grounding of the Boeing 737 Max contributed to a second consecutive month of falling passenger numbers in June and also impacted negatively its on-time performance (OTP). Passengers carried dipped one percent in June compared to the same month last year, to 3.5 million, following a two percent year-on-year drop in May. The low-cost carrier (LCC) has Europe’s largest Max fleet, with 18 of the type in service when the grounding took effect in mid-March.

The Oslo-based operator has replaced most of the Max narrowbodies with short-term wet-lease capacity, though this led to just 70.9 percent of its flights departing on time in June. This is more than 10 percentage points down on the OTP achieved in the first months of the year though it is on par with June last year, when the airline had to deal with the blade durability problems in the Rolls-Royce Trent 1000 engines that power its Boeing 787 fleet. “This wet-lese capacity is not part of our day-to-day operations and we have less control over it,” a Norwegian spokesman told AIN. “This is the case with most airlines, not just Norwegian." Most of the Max replacement wet-lease capacity is deployed in the Nordic countries and out of the Irish capital Dublin, from where the carrier operated Max aircraft on transatlantic services. Since March, Norwegian has been using an Airbus A330 aircraft leased from Spain's Evelop Airlines to operate the route between Dublin and New York's Stewart International Airport.

The Max debacle, however, also helped Norwegian to implement its strategy to temper its rapid growth and close down unprofitable routes in order to strengthen its balance sheet. Capacity in terms of available seat kilometer (ASK) rose five percent in June year-on -year, while revenue passenger traffic (RPK) rose at a higher rate of seven percent. The load factor was 91.5 percent, up one percentage point. Yield and unit revenue were up nine and 10 percent, respectively. “Following a period of significant expansion and investments, I’m pleased to see that the June figures show 10 percent higher unit revenue and that our growth is slowing down, in line with our strategy of moving from growth to profitability,” commented Norwegian CEO Bjørn Kjos.  The bulk of the growth was achieved in the long-haul segment. The group took delivery of its 36th Boeing 787-9 in June.

Most of the widebody twinjets are based at London Gatwick, where the LCC launched long-haul flights five years ago and now flies more than 1.5 million passengers each year to 11 U.S. cities, Buenos Aires and Rio de Janeiro. Norwegian has grown its London Gatwick base to more than 1,500 pilots and cabin crew today.