Shares in Norwegian tumble as margins hit

Shares in Norwegian Air Shuttle tumbled on Thursday morning after the company announced that growing competition had driven down its yields, which reflect average fares, by 21 percent in February, compared to the year before.

Shares in Norwegian tumble as margins hit
One of Norwegian's new Dreamliners arriving from New York at Stockholm Arlanda airport - Johan Nilsson / NTB Scanpix
Shares fell 5.5 percent immediately after the news was announced, before rebounding,  hovering at just over 1 percent down by early afternoon. 
The company's founder and chief executive Bjørn Kjos blamed price competition with other carriers for its falling profitability. 
"There’s strong competition in the market and many affordable tickets available, which benefits the customers," he said in a statement. "At Norwegian, we are prepared to meet the competition by introducing even more brand new aircraft to the fleet, expanding the route network and adding new destinations to the route map. New aircraft with lower fuel burn is key to keeping costs down and continue to offer more low-fare tickets." 
Some 1,527,099 passengers flew with Norwegian in February, a 22 percent leap on the same month last year, as it brought in long haul flights to Thailand and the US, using the new Boeing 787 Dreamliner plane. 
The company expects to take delivery of four new 787 Dreamliners during the first half of 2014, as well as 15 new 737-800 aircraft. 

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Norwegian ranked most fuel efficient airline

Norwegian Air been ranked the world's most fuel efficient major airline in a new study released on Tuesday, thanks to its growing fleet of fuel efficient Dreamliner aircraft.

Norwegian ranked most fuel efficient airline
One of Norwegian Air Shuttle's Boeing 787 Dreamliners coming into land. Photo: Creative Commons
The study, by the International Council for Clean Transportation (ICCT), found that Norwegian used the least fuel per passenger of all the 20 major non-stop transatlantic carriers, using 51 percent less than the UK's BA. 
According to the study Norwegian's Scandinavian rival SAS was among the three least fuel efficient carriers, along with BA and Germany's Lufthansa.  Together, the three laggards account for some 20 percent of the transatlantic air travel market.
Air Berlin and Ireland's Aer Lingus came in second and third in the study, which the ICCT said was intended to provide greater insight into the fuel efficiency, and therefore carbon intensity, of international flights.
The study, which comes ahead of a Paris conference on climate change due to start November 30, showed Norwegian Air Shuttle, the world's seventh-largest low-cost airline, averaged 40 passenger kilometres per litre of fuel.
By comparison, Germany's second-largest airline Air Berlin had a fuel efficiency of 35 passenger kilometres per litre.
It was the US-based ICCT which helped to uncover the pollution cheating scandal at German auto giant Volkswagen in September after it tested actual emissions figures for diesel cars and found some Volkswagen models to be above permitted limits.
Noting the fuel efficiency disparities between the carriers, ICCT said seat configuration was a key factor in the results and that the average fuel burn of the aircraft used was also significant.
It also noted that first class and business class seats accounted for around a third of carbon emissions but only 14 percent of overall seats.
“The very high fuel efficiency of Norwegian Air Shuttle demonstrates the central role of technology in reducing CO2 emissions from the aviation sector,” the ICCT concluded.
“Airlines that invest in new, advanced aircraft are more fuel-efficient than airlines that use older, less efficient aircraft.”