The situation in the Strait of Hormuz has meant soaring energy prices, a blow to airlines, which are now seeing sharply rising costs for jet fuel.
But when, for example, the German Lufthansa announced that it would cancel around 20,000 flights, the situation is different for Norwegian, says the company's CEO. The background is that, like low-cost carrier Ryanair, it has hedged itself against fluctuations in the price of jet fuel. This works in much the same way as a mortgage borrower can choose a fixed interest rate.
"We have secured approximately 50 percent of the fuel we use. This means that we have secured it at a significantly lower price than is being paid today, and this applies for the rest of the year," explains Geir Karlsen.
Positive factor
Another positive factor is a strengthening Norwegian krone, while there is no sign of reduced demand from customers. During the first quarter, the company had a record cabin factor, i.e. how full the planes are, of 87.6 percent.
"It is clear that when competitors around us cancel, it is reasonable to believe that some of these passengers will then choose to fly with Norwegian," says Geir Karlsen.
No reduction in demand
Demand has therefore not decreased, even though the company has raised its prices. However, Geir Karlsen does not want to reveal how much.
"It varies depending on destination and day of the week you fly, but it has become a little more expensive to fly."
A clear trend the company is seeing is an increase in traffic from the rest of Europe to Scandinavia, something that is usually referred to as a "coolcation" when tourists seek cooler destinations during the height of summer.
"It is a growth that we expect to see, not only this year but also in the coming years."
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