Norwegian Air Shuttle SWOT: LCC reports industry-leading operating margin in 3Q2009

Investors love Norwegian. Since the start of March 2009, the airline's stock has surged over 420%. Why? Strong margins and low costs - and disarray among its rivals. Scandinavia’s largest LCC, Norwegian Air Shuttle, reported a net profit of EUR45 million in the three months ended Sep-2009 (3Q2009) and an operating profit of EUR57 million (-10% and +146%, respectively), for an 11 ppt operating margin improvement, to an industry-leading 21%. The carrier’s EBITDAR and EBITDA margins were 29% and 23%, respectively. [1951 words]

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This report contains the following subheadings:

• Market reacts positively, with share price continuing to rise
• Strengths: Capitalising on cutbacks from struggling Nordic rivals, has positive effect on revenues and profitability
• WEAKNESSES: Challenged by a weakening NOK, yield pressures beginning to show
• OPPORTUNITIES: Current conditions suit the LCC model
• THREATS: Expects slowdown in business environment
• OUTLOOK: Risk and uncertainty moving into 2010

This report contains the following charts and tables:

• Norwegian EBITDAR and EBITDA margins: 3Q2006 to 3Q2009
• Norwegian financial highlights for three months ended Sep-2009
• Norwegian share price growth: Jan-2009 to Oct-2009
• Norwegian revenue growth (domestic and international): 3Q2006 to 3Q2009
• Norwegian’s market share on major routes from Oslo: 3Q2006 to 3Q2009
• Norwegian, Finnair and SAS Group total passenger number growth: Aug-2008 to Sep-2009
• Norwegian’s capacity (ASKs) and load factor (%): 3Q2006 to 3Q2009
• Norwegian fleet growth: 1Q2008 to 4Q2011
• Norwegian CASK ex fuel and unit fuel costs: 3Q2006 to 3Q2009
• Norwegian sensitivity analysis: Sep-2009 
• Norwegian cost breakdown: 2Q2008 vs 3Q2009 
• Norwegian Air Shuttle yield growth: May-2008 to Sep-2009
• Norwegian Air Shuttle unit revenue (RASK) growth: Apr-2009 to Sep-2009