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Norwegian Air says 2019 profit target in doubt after MAX groundings

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By Reuters
Norwegian Air says 2019 profit target in doubt after MAX groundings
FILE PHOTO: A satellite antenna is seen on the roof of the Norwegian Airways Boening 737-800 at Berlin Schoenefeld Airport, Germany, April 2, 2015. REUTERS/Pawel Kopczynski/File Photo   -   Copyright  Pawel Kopczynski(Reuters)

OSLO (Reuters) – The grounding of Norwegian Air’s fleet of Boeing 737 MAX aircraft may scupper the carrier’s plan to return to profitability this year, it said while posting a widening first-quarter loss on Thursday.

“Due to the uncertainty related to the MAX grounding, the company sees increased risk related to the target of a positive net profit in 2019,” Norwegian said.

The grounding last month of its 18 MAX planes following the deadly crash of an Ethiopian jet, has forced Norwegian to pay for leases of other aircraft as the peak summer season nears.

The budget carrier’s net result plunged to a loss of 1.49 billion Norwegian crowns (£133.5 million) from a 46.2 million crowns loss a year ago, while analysts in a Reuters poll on average had expected a deficit of 1.65 billion crowns.

Norwegian, which has cut costs and raised money from shareholders in recent months, said late on Wednesday it had agreed with Boeing and Airbus to postpone more aircraft deliveries as it seeks to preserve cash.

The Oslo-listed airline has shaken up the long-haul market by offering cut-price transatlantic fares, but its rapid expansion has left it with hefty losses and high debts.

In February Norwegian announced it would start prioritising earnings rather than growth, slashing its target for 2019 capacity increases to just 9 percent from 15-20 percent, while on Thursday it predicted growth of 5-10 percent.

(Reporting by Terje Solsvik and Victoria Klesty, editing by Gwladys Fouche)