Norwegian Air Loses Millions Due to Boeing 737 MAX 8 Grounding

Apr 25, 2019

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Norwegian Air, the cash-strapped low-cost carrier, said in its first quarter earnings call on Thursday that the grounding of the Boeing 737 MAX will throw a wrench in its efforts to finally become profitable.

“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 in its earnings report, according to Reuters.

The airline estimated the grounding of its 18 MAX planes will cost it about 500 million Norwegian kroner ($57.7 million USD). The MAX is expected to be out of commission worldwide through the peak summer travel season. This means Norwegian must lease additional aircraft to replace its MAX fleet through this busy travel time. “The company will continue to limit passenger disruptions by also offering flights with wet lease companies whenever necessary,” the airline said in its earnings report.

The Oslo-based carrier was caught in a similar situation, as were airlines worldwide, when it was forced to ground several of its 787 Dreamliners for engine work last year.

Southwest Airlines also said in its Wednesday earnings call that it lost at least $200 million due to the grounding of its 34 MAX planes, as well as other factors like bad weather and issues with its maintenance workers. In its earnings report, Southwest said that it canceled 10,000 flights due to its grounded MAXs. The LUV carrier, however, still managed to grow its revenue by 4% more than the same quarter last year to $5.1 billion.

Norwegian’s losses could mean dire straits for the airline, which has been trying to cut costs and increase its cashflow to turn into a profitable business. At the beginning of the year, the airline raised about $353 million in a share sale and has made moves like cutting its service to the Caribbean as part of putting “cost-cutting measures as a priority and aircraft utilization in focus.”

The airline did say it was able to cut 467 million kroner ($53 million USD) in spending this quarter, and hopes to keep shrinking costs.

Norwegian reported huge losses in 2018, totaling a net loss of 1.5 billion Norwegian kroner ($175 million USD). Aviation experts have been watching Norwegian for signs of collapse for many months.

“Norwegian is in a race against time,” BBC’s Theo Leggett wrote in January. “It needs to become consistently profitable, before the money runs out.”

For the latest travel news, deals and points and miles tips please subscribe to The Points Guy daily email newsletter.

Featured photo by Ryan Patterson.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
15.74%-24.74% Variable
Annual Fee
$250
Balance Transfer Fee
N/A
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.