OSLO (Reuters) - Higher than expected pressures on budget airline Norwegian Air’s (NWC.OL) average revenue yield more than offset strong traffic figures for September, sending its shares lower on Thursday.
Norwegian Air, which is trying to crack the transatlantic market by undercutting established rivals, has embarked on an ambitious expansion plan, buying more than 200 new fuel-efficient jets.
Yet investors worry its drive to put more passengers on more planes is pushing up costs quickly without producing higher returns.
Norwegian said its estimated yield, or revenue per passenger carried and kilometre flown, was 0.39 Norwegian crowns (0.0372 pounds), below the 0.40 crowns seven analysts polled by Reuters expected.
Both its total capacity and passenger traffic increased by more than expected as the airline continued to add new aircraft and long-haul destinations during the month, it said.
At 0911 GMT shares in Norwegian were down 3.3 percent at 232.2 Norwegian crowns.
“The numbers were a bit on the weak side. The yield and load factor were somewhat below our expectations,” analyst Kenneth Sivertsen at brokerage Pareto Securities said.
DNB Markets, which expected Norwegian Air to report a yield of 0.42 Norwegian crowns, said the airline’s shares were set to fall on Thursday and repeated its sales recommendation and price target of 170 Norwegian crowns before potential adjustments.
Reporting by Henrik Stolen; Editing by Gwladys Fouche, Greg Mahlich