Norwegian Air Falls as Passenger Yields Slip in July: Oslo Mover

Norwegian Air Shuttle ASA, western Europe’s fourth-largest low-cost airline, declined the most in two months in Oslo trading as passenger yields struggle to keep pace with growth in traveller numbers.

Shares in the Fornebu, Norway-based airline dropped as much as 8 percent, the biggest intraday fall since June 7, and traded 6.5 percent lower at 246 kroner as of 11:55 a.m. More than 264 million kroner ($44.5 million) of Norwegian shares have been traded so far today, making it the most-traded stock in terms of value on the Oslo stock exchange’s OBX index.

While Norwegian’s passenger numbers climbed to a record 2.1 million in July, the yield, a measure of passenger revenue for each kilometer flown, declined an annual 11 percent, the biggest decline this year, the airline said in a statement today.

“While the growth in available seat kilometers was in line with management’s guidance of 30 percent for the full year, the yield declined somewhat more than in recent quarters,” analysts at Pareto Securities AS said in an e-mailed note to clients.

Norwegian, which last year ordered 222 Boeing Co. and Airbus SAS airliners valued at 127 billion kroner, is flying new routes and opening bases outside the Nordic region as it steps up competition with state-backed SAS Group AB. Norwegian, founded in 1993, switched to a discount model in 2001, emulating Ryanair Holdings Plc and EasyJet Plc.

Norwegian is western Europe’s fourth-largest low-cost airline, after EasyJet, Ryanair and Air Berlin Plc, according to data compiled by Bloomberg.

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