Norwegian Air Profits Defy Rising Costs

Norwegian Air Shuttle has reported stronger-than-expected quarterly earnings as robust summer travel demand offset rising fuel costs, although the airline is scaling back planned flights amid uncertainty over operating expenses and Middle Eastern routes.

The Norwegian carrier posted third-quarter operating profit of 2.7 billion crowns, above analysts' expectations of 2.3 billion crowns. Management said passenger demand strengthened across its markets during the peak holiday season, while forward bookings and aircraft load factors remained ahead of last year's levels. Its performance nevertheless came with higher expenses: unit costs, a measure of expenditure per available seat, increased 8% to 0.69 crowns.

Norwegian has reduced planned capacity for the first quarter of 2027 by more than 5%. Chief executive Geir Karlsen linked the move to expensive fuel and the suspension of flights to Dubai and Tel Aviv. The company expects overall capacity growth of 2% this year and about 5% in 2027 as its fleet approaches 100 aircraft. It has hedged around 30% of next year's first-quarter fuel requirements.

The results reveal the limits of strong demand when travellers remain sensitive to ticket prices. Karlsen said attempts to raise fares after the war in Iran were not sustained because customers resisted the increases. Norwegian must therefore balance seat availability with costs that cannot always be passed on. For Europe's low-cost airline sector, the challenge is maintaining profitable routes without pricing holidaymakers out of the market. Further capacity adjustments will be judged against advance bookings, particularly as winter demand differs from the summer peak.