OSLO (Reuters) – Norwegian Air’s (NWC.OL) Bjoern Kjos stepped down on Thursday as chief executive of the airline he co-founded and turned into Europe’s third-biggest budget carrier by passenger numbers.
FILE PHOTO: Bjorn Kjos, CEO of Norwegian Group, speaks during the presentation of Norwegian Air first low cost transatlantic flight service from Argentina at Ezeiza airport in Buenos Aires, Argentina, March 8, 2018. REUTERS/Marcos Brindicci/File Photo
Chief Financial Officer Geir Karlsen will act as interim CEO while the company recruits a permanent, new CEO. Kjos, who is 72, will have a new role as an adviser to the chairman.
The airline has shaken up the long-haul market with cut-price transatlantic fares, but its rapid expansion has left it with hefty losses and high debts and it had to raise 3 billion crowns ($350 million) from shareholders earlier this year.
“I am way overdue,” Kjos, laughing, told a news conference, announcing his plans to quit the top job. A former fighter pilot, Kjos helped to expand what was a tiny Norwegian airline housed in pre-fabricated barracks on the edge of Oslo airport.
“Bjorn has been the driving force behind the business – the big question now is whether Norwegian Air can maintain momentum as he takes a less active role,” Bernstein said in a note to clients.
The airline also said it expected its 18 grounded Boeing (BA.N) 737 MAX aircraft to return to service in October, compared with its previous view that they would return to service in August.
The jets have been grounded worldwide since March following two fatal crashes and Norwegian Air has said the disruption could scupper its plans to return to profitability this year.
The company, which was set up in 1993, reported second-quarter earnings that beat expectations on Thursday.
Its net profit came in at 82.8 million Norwegian crowns ($9.7 million), down from 300.3 million in the same period last year, but ahead of the average forecast of 76.2 million from five analysts compiled by Refinitiv.
Its shares traded 2% higher at 0723 GMT.
The company cut its target for passenger carrying capacity growth to 0-5%, compared with the previous guidance for 5-10%.
It said earnings before interest, tax, depreciation and amortization and restructuring or rent costs (EBITDAR), excluding “other” losses or gains for items such as foreign currency contracts and forward fuel contracts, were expected to reach 6–7 billion crowns in 2019, up from 3.2 billion in 2018.
Editing by Mark Potter/Keith Weir