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IAG rejected bid target Norwegian Air Shuttle sees second-quarter net profit beat expectations as it reins in costs

Europe's third-largest budget airline by passenger numbers posted a second-quarter net profit of NKr300mln (US$37.07mln), compared with a loss of NKr691mln a year earlier
Norwegian Air plane
British Airways owner bought a 4.6% stake in Norwegian in April and has made two offers for the airline, both of which were rejected

Norwegian Air Shuttle saw its second-quarter net profit beat expectations as the budget airline – in which British Airways owner International Consolidated Airlines Group PLC (LON:IAG) bought a stake earlier this year – reined in its costs as its transatlantic expansion starts to peak.

The group, Europe's third-largest budget airline by passenger numbers, posted a second-quarter net profit of NKr300mln (US$37.07mln), compared with a loss of NKr691mln a year earlier.

READ: IAG could face tough bid battle for Norwegian Air after Lufthansa boss shows interest

The company said its unit costs, including depreciation and excluding fuel, fell to NKr0.29 from NKr0.35 a year earlier, helped by lower technical costs and less hiring of spare aircraft and crew when needed

It said it plans capital expenditure of US$1.75bn this year, down from its previous forecast of US$1.9bn.

Norwegian carries more than 30mln passengers a year, including 5.2mln from the UK following a rapid expansion with flights costing as little as £99 one-way to New York.

IAG – also the owner of Iberia, Vueling and Aer Lingus - bought a 4.6% stake in Norwegian in April and has made two offers for the airline, both of which were rejected.

Too early to sell airline

Norwegian Air CEO and founder Bjoern Kjos again reiterated today that it was too early to sell the airline, according to Reuters.

Kjos and Norwegian Air chairman Bjoern Kise are the top shareholders in the company via HBK Invest Holding which owns around a quarter of the company, Reuters noted.

Aside from IAG, the boss of Deutsche Lufthansa said in June that the German airline was interested in making a bid for Norwegian.

In an interview, Lufthansa’s CEO Carsten Spohr told German newspaper Suddeutsche Zeitung: "In Europe, everyone is talking to everyone. There's a new wave of consolidation approaching. That means we are also in contact with Norwegian."

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