Nevertheless, despite the inflationary cost, its unit costs, which excludes fuels but includes leases, are up only 1%. When we look at scaling capacity as a way to better amortize costs, Norwegian doesn’t seem to be there quite yet. On a 56% expansion in capacity, costs excluding fuel and leases increased 63% driven by items such as inflation. Less easy was the 143% surge in fuel costs. Revenues doubled year-over-year, which is nice, but this is driven by an easy comp. So, don’t take these results and project them into the future because that’s a mischaracterization of performance. When looking at the first quarter results, we should keep in mind that naturally the first quarter of the year is the weakest for many airlines, including Norwegian. Since my last coverage, Air France-KLM stock tanked so the Norwegian Air Shuttle performance is now exceeding that of Air France-KLM, but we're not seeing a strong turnaround in the stock price even though in my view the company’s results are materially improving. It does outperform the general markets and the JETS ETF, but that is about it. The conclusion I return to quite often is that it's among the bottom performers when it comes to share price development. What I have been doing in my past coverage of Norwegian is looking at the share price performance. Norwegian Air Shuttle Stock: Still An Underperformer But Outperforms Market Data by YCharts In this report, I will analyze the Q1 2023 and comment on the stock performance. In some way, the pandemic was an unfortunate eye-opener for Norwegian Air Shuttle that it had to do things differently. Bombardier put itself in significant debt for the development of the C Series, but was never able to benefit, but the company is thriving now. It actually reminds me a lot of Bombardier ( OTCQX:BDRAF). So, the company grew, and it failed to generate value while compounding debt. The pandemic could have pushed the company over the edge, but the reality was that the company was badly managed prior to the pandemic, and it kept growing without creating economies of scale or generating value, or as Ryanair’s ( RYAAY ) CEO said: If you have to sell aircraft to pay the fuel bill for your next flight, you don’t have a sustainable business. Norwegian Air Shuttle ( OTCPK:NWARF) is one of the companies that seemed to have made its final journey during the pandemic.
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