Norwegian Air loss widens on fuel costs, emissions court ruling (updated)
UPDATE 3-Norwegian Air loss widens on fuel costs, emissions court ruling adds share move in paragraph 5, CEO comments in paragraphs 8-9
By Vera Dvorakova
July 14 (Reuters) - Budget airline Norwegian Air Shuttle NAS.OL reported a wider-than-expected quarterly operating loss on Tuesday, hit by heightened fuel costs and a Norwegian Supreme Court ruling on European Union emissions obligations.
The result marked a sharp reversal from a year ago, when Norwegian posted a profit of 1.25 billion crowns for the April-June period and said it would pay its first-ever dividend.
Norwegian's operating loss was 603 million Norwegian crowns ($61.7 million) in the second quarter, larger than the loss of 517 million crowns expected by analysts polled by the carrier.
The budget carrier booked a one-off 733 million crown loss in June after Norway's Supreme Court rejected its appeal over 2020 EU emissions obligations, which it said it could not meet while under reconstruction.
The shares opened 3% lower.
The U.S.-Israeli war with Iran and the blockade of the Strait of Hormuz have disrupted global oil supply and sent oil and jet fuel prices higher, prompting flight disruptions and cancellations. While airlines have begun resuming some flights to the region, the conflict-related disruption continues.
Norwegian Air's unit costs, the average cost of flying an aircraft seat, rose 6% from a year ago to 0.76 crowns in the quarter.
The airline has hedged about 55% of estimated jet fuel consumption for 2026 and about 25% for 2027. CEO Geir Karlsen said on a conference call that Norwegian would "most likely" add more hedges for 2027 soon.
Karlsen told Reuters the airline buys most of its fuel in Scandinavia and the Nordics and does not see fuel shortages despite the media attention on the topic.
Norwegian said overall market conditions remain good, with the number of tickets sold above the same period last year, despite "somewhat softer" summer season demand than expected.
($1 = 9.7666 Norwegian crowns)
(Reporting by Vera Dvorakova in Gdansk; Editing by Matt Scuffham)