Norwegian Air has solid bookings, high demand, decreased costs, and increasing revenue. Despite those promising figures, the budget airline probably won’t make any money this year due to one thing: the grounding of the Boeing 737 Max 8.
In an earnings release today, the airline’s CEO, Bjørn Kjos, said that he is “pleased with the positive developments this quarter, despite the 737 Max issues.”
And those are some pretty big issues: Norwegian’s Q1 earnings showed the financial impact of the 737 MAX grounding at around $58 million (500 million NOK), translating to what the Independent determined was a loss of $21 for every passenger who flew Norwegian in the first three months of 2019. This loss is partly due to the ongoing grounding of the Boeing 737 Max following two fatal accidents on Lion Air and Ethiopian Airlines that claimed a total of 346 lives.
Norwegian was hit particularly hard as it had 18 Boeing 737 Max 8 aircraft in its fleet. Per the Independent, in the first two months of 2019, about 30% of all 737 Max flights from European airports were operated by Norwegian.
As the grounding continues and the airline waits for Boeing and the U.S. Federal Aviation Administration to agree on a software patch that should correct the faulty anti-stall software implicated in the two crashes, Kjos is optimistic.
However, he’s also stated that he fully expects Boeing to pay up: “We hope and expect that our MAXs will be airborne soon,” Kjos said in a statement in March. “Many have asked questions over how this affects our financial situation. It is quite obvious that we will not pay the costs related to the new aircraft that we have to park temporarily. We will send this bill to those who produced the aircraft.”
Norwegian’s earnings report comes days after Southwest reported it lost revenue of $200 million in its fiscal first quarter after canceling 10,000 flights due to the grounding of the Boeing plane, of which it operated 34. It said the recent U.S. government shutdown was also a factor.