Norwegian Air eyes 20% gain in summer ticket prices on solid demand
Adds CEO quotes
By Victoria Klesty
OSLO, Feb 16 (Reuters) -Budget carrier Norwegian Air NAS.OL has raised summer 2023 ticket prices by about 20%, its CEO told Reuters on Thursday, reflecting mostly solid demand despite inflationary pressures.
Norwegian Air emerged from government-backed bankruptcy proceedings in May 2021 after shedding much of its debt and its transatlantic network.
"Based on what we have sold as per today, for the summer, we are about 20% higher than for the same period last year," Geir Karlsen said on the sidelines of an earnings presentation.
The higher prices also partly reflect Norwegian's increased attention on business customers, having improved its product and punctuality, which these customers expect, Karlsen said.
"We are beating our competitors on these areas," Karlsen told a news conference earlier. "We have been doing that for a while now."
The Nordic airline market, although tough, is less crowded than Norwegian - currently flying at 30% of capacity - had envisioned in the autumn.
Flyr, a newcomer which emerged at the end of the pandemic curbs on air travel, filed for bankruptcy two weeks ago, having failed to raise enough cash to survive the winter season.
Norwegian has chosen to currently fly less than legacy player SAS SAS.ST, which Norwegian considers its closest competitor, Karlsen said. SAS is undergoing a reorganisation under U.S. Chapter 11 bankruptcy protection proceedings.
Other competitors were being cautious, he added.
"We are seeing players such as EuroWings at Arlanda (airport in Stockholm) is not coming in with capacity that they had been (planning), and Ryanair ... not starting up a Copenhagen base this year, which they had been planning to do," said Karlsen.
European airlines have reported solid holiday demand despite concern recessionary pressures could curb travel. Holiday group TUI TUIGn.DE earlier this week said it was seeing encouraging booking trends for summer and next winter as customers return following a pandemic hiatus.
While the market for flights out of Sweden and Finland look challenging, demand from Norway and Denmark has been solid, Karlsen said.
"The macro effect is hard to say anything about, but we don't see a downward effect in our bookings," he said.
Reporting by Victoria Klesty, editing by Terje Solsvik and Sharon Singleton
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