May 7, 2018 / 6:44 AM / 3 months ago

Norwegian Air boosts April traffic with cheaper tickets

OSLO, May 7 (Reuters) - Budget carrier Norwegian Air raised its passenger traffic by 44 percent year-on-year in April as its long-haul expansion accelerated, but tickets were sold at lower prices than analysts had expected.

Released just days after Norwegian rejected takeover proposals from British Airways-owner IAG, the data showed income per passenger carried and kilometre flown of 0.35 Norwegian crowns, missing a Reuters poll forecast of 0.39.

“As a result of the capacity increase we have offered a high volume of low fare tickets to attract new customers, consequently impacting the yield this month,” Chief Executive Bjoern Kjos said in a statement.

London-listed IAG last month took a 4.6-percent stake in the company, which in turn triggered interest also from other suitors, Norwegian said on April 26.

In the midst of a massive transatlantic expansion to replicate the low-cost model that worked for European flights, Norwegian hopes to soon reap the benefits and turn around its loss-making operation.

The airline’s capacity, known as available seat kilometres or ASK, rose by 51 percent year-on-year, beating a forecast of 47.7 percent, while revenue-generating kilometres flown (RPK) grew by a smaller 44 percent, lagging a 45.1 percent forecast. (Reporting by Terje Solsvik, editing by Ole Petter Skonnord)

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