Tag Archives: msn 19020011

Widerøe talks about rising costs and announces a new collaboration with Norwegian

Wideroe (Widerøe’s Flyveselskap AS) Embraer E190-E2 (ERJ 190-300STD) LN-WEC (msn 19020011) AYT (Ton Jochems). Image: 947538.

The market in April was weaker than expected. The decline is due to several factors. Widerøe is in line with a number of other Norwegian companies characterized by large cost increases as a result of a weak Norwegian krone. This is particularly reflected in cost increases for currency and fuel, and the costs here have increased by 70 per cent since 2019. There has therefore been a need to pass some of the cost increase on to customers and Widerøe has raised the prices somewhat in April. The unit income of Widerøe has nevertheless only been adjusted in line with the CPI, and far less than what the increase in costs would indicate. We see the result directly in the demand for tickets, and for the first time we see that the total market is smaller than in 2022. This applies not only to Widerøe, but to plane tickets in general, and the decrease for Widerøe is 13.7 percent.

The price increase towards customers is probably perceived as stronger than just the CPI adjustment, as Air Passenger Duty is back at the top of the price adjustment. Altogether, this has a large negative impact on demand.

The market outlook going forward is considered uncertain. Necessary price adjustments have a direct impact on demand, and a continued weak krone exchange rate will continue to negatively affect the company’s profitability.

  • April was weaker than planned and bears the mark of a price increase with a subsequent failure in demand, says CEO of Widerøe Stein Nilsen. – The industry is in a very difficult situation where a weak krone exchange rate results in large cost increases which we can only partially pass on to customers. This, combined with a large increase in taxes and fees compared to 2022, means that the total market is for the first time smaller than in 2022, concludes Nilsen.

We start May with good news. Widerøe and Norwegian are expanding their collaboration to also include foreign destinations. This means that our passengers can now travel on non-stop journeys from Berlevåg to Rome with Widerøe and Norwegian, with one ticket, non-stop luggage and with far shorter layovers than before. It also means that passengers arriving in Norway with Norwegian and going onward with Widerøe can now make use of Domestic Transfer at Gardemoen.

Top Copyright Photo: Wideroe (Widerøe’s Flyveselskap AS) Embraer E190-E2 (ERJ 190-300STD) LN-WEC (msn 19020011) AYT (Ton Jochems). Image: 947538.

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