Norwegian Breaks Records Again, But Lost a Lot of Money

Scandinavian low-cost carrier Norwegian Air is making all kinds of waves of late on February 8, Flight DY7014 traveled from New York (JFK) to London (LGW) in 5 hours and 9 minutes, beating its own commercial subsonic transatlantic speed record set just a few weeks prior by 4 minutes.

A powerful jet stream contributed to the accomplishment, pushing the Boeing 787-9 Dreamliner to a top cruising speed of 799 mph, more than 20 mph faster than last month's record.

"This is certainly a monumental coup for Norwegian as we’ve gone from fast growing to fastest-going," said captain Martin Wood. "We flew at 33,000 feet right in the core of the jet stream at 193 knots (222 mph), which was surprisingly smooth and pushed us toward breaking the transatlantic flight record time again on our brand new Boeing 787 Dreamliner."

Jet streams are the powerful West - to - East winds that cause eastbound flight times to be shorter than the other direction. Flight crews decide their routing on long-haul flights across the North Atlantic based, among other factors, on where jet streams are blowing on a given date, in order to take advantage of tail winds and avoid head winds. Norwegian has been especially good at finding this winter's very strong jet streams.

SkyTrax World Airline Awards has awarded Norwegian Air the title of "World's Best Long-Haul, Low-Cost Airline" for three years running, a tagline the airline has proudly adopted into its branding. Norwegian CEO Bjoern Kjos also just said that he wants to expand with routes into both Africa and the Middle East, which he said is tough to do because of what he called opposition by local politicians.

Yet not all headlines have been glowing. Kjos also said that he is "not at all satisfied" with the airline's recent financial results. The carrier just reported a net loss of €30.8 million ($38 million USD) in 2017, compared to a €116 million ($144 million) profit in 2016. The financial loss was driven by "significant" costs associated with hiring expansion as well as rising fuel prices. Excluding the increased cost of fuel, Norwegian's costs in 2017 rose by 6%.

Last year Norwegian added 32 new aircraft to its fleet, which has an average aircraft age of just 3.6 years. Several of those new planes have been Boeing 787s, far bigger (and more expensive) than the 737s forming the bulk of the fleet. That's good news for passengers and the environment, because newer and larger planes pollute less per each passenger transported, but not necessarily for investors: Norwegian shares have dropped more than 30 percent this year. The airline is betting on future growth to drive profit: more than 33 million passengers flew Norwegian in 2017, a 13% increase over 2016.

Yet, Thursday the airline said the outlook for growth and costs was worse than previously expected. A Swedbank analyst who follows the company said numbers for the second quarter of 2018 are “light years behind expectations.”