Norwegian Air’s Dreamliners are grounded but stock is soaring

Norwegian Air Shuttle AS said demand for tickets aboard flights connecting Scandinavia with Asia have exceeded expectations as the company prepares to inaugurate its new long-haul network next month.

The airline will begin flying from Oslo to New York City’s John F. Kennedy on May 30 using a Airbus SAS A340 as a substitute for the Boeing Co. 787 Dreamliner originally planned for the route, the company said in a statement today.

Chief Executive Officer Bjoern Kjos said last month that he’s looking to buy more 787s to add long-haul routes even as the company’s first Dreamliners remain on hold after the model was grounded globally. Norwegian Air is among airlines affected by the idling of the entire Dreamliner fleet on Jan. 16 in the wake of incidents with lithium-ion batteries. The airline is scheduled to introduce three 787s this year, four next and the eighth in 2015, with five leased and three bought outright.

“The establishment of the long-haul operation is developing in accordance with plan,” the Fornebu, Norway-based company said in the statement. Norwegian Air’s longer-term aim for the 787 is to focus on destinations in Asia as it seeks to tap demand for affordable log-haul flights among the emerging middle class, Kjos said in March.

Norwegian Air rose as much as 7.9 percent to 237.5 kroner and traded at 236.9 kroner at 10:34 a.m. in Oslo. The company’s stock has risen 65 percent this year, valuing the airline at 8.33 billion kroner ($1.4 billion).

The airline reported a 117.2 million kroner loss in the first quarter, down from a 285.5 million kroner loss a year earlier. Sales gained 23 percent to 2.9 billion kroner, while the number of passengers jumped 8 percent to 3.93 million.

Editor: Benedikt Kammel. To contact the reporter on this story: Kari Lundgren in London at [email protected]. To contact the editor responsible for this story: Benedikt Kammel at [email protected].