EUR 86.81 For Business Accounts Only

Norwegian Air Shuttle (Buy, TP: NOK13.00) - Very strong traffic statistics

We consider this a positive report for Norwegian Air Shuttle, including a yield, ancillary, ASK and load above our expectations July. We expect c15–20% positive revisions to consensus 2022e EBITDA on the back of the report and believe a significant positive share price reaction of 10–20% is warranted. Impressive yield and ancillary. The yield was NOK0.86, up 48% YOY and 28% MOM (we expected NOK0.8). Relative to July 2019, the yield was up 69%. Note there are some differences in the average flight distance, with a positive impact on the numbers (the average distance fell by 26% YOY in 2020 versus 2019 on the removal of long-haul flights). The average flight distance in July was up 24% YOY. Implied ancillary spending per passenger in July was NOK213, versus our forecast of NOK185. RPK and load factor above our expectations. RPKm was 3,139 (we expected 2,906), ASKm was 3,322 (we expected 3,125) and the load factor was 94.5% (we expected 93%). Total passengers were 2.21m (we forecast 1.94m). Regularity and punctuality were 99.7% (July 2021: 99.8%) and 62.2% (July 2021: 88.3%), respectively. On average, Norwegian Air Shuttle operated 70 aircraft in July, compared to 68 in June. Estimate revisions. We forecast implied July EBITDA of NOK1,373m versus our forecast of NOK993m ahead of the report. We expect consensus 2022e EBITDA to be revised up 15–20% on the back of the report.