Stocks Trading

Norwegian airline shares: A comprehensive investor's guide

Skilling Writers Team
2023-10-18
- Stocks
- Trading

Norwegian airline share image representation of a norwegian airline in the sky

In the ever-evolving landscape of the aviation industry, few companies have experienced as tumultuous a journey as Norwegian Air Shuttle ASA (“Norwegian/ Norwegian airline”), a Norwegian low-cost airline that has captured both praise and scrutiny.

With its focus on affordable flights within the Nordic countries and across Europe, Norwegian emerged as a major player, transporting over 30 million passengers in 2016, cementing its position as Denmark's largest low-cost carrier.

However, a series of restructuring efforts between 2018 and 2020 left the Norwegian airline share in a vulnerable state, setting the stage for a challenging period that was further exacerbated by the devastating impact of the COVID-19 pandemic on the entire airline industry.

In this article, we delve into the highs and lows of Norwegian's journey, exploring what it does, historical events that affected its share price, its pros and cons and how to trade it.

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So what is Norwegian's primary business?

Norwegian Air Shuttle ASA operates flights from the Nordics region to various destinations within Europe. As the largest low-cost carrier in Denmark, Norwegian has established a strong presence in the industry sector. Norwegian has a history dating back nearly three decades. Founded in 1993, the company commenced operations as a low-cost airline in 2002, utilizing Boeing 737 aircraft.

At the core of Norwegian's business model is the commitment to providing affordable fares to a wide range of travelers. The company aims to offer a smarter way of flying by allowing passengers the freedom to choose and pay only for the services they require.

This approach, highlighted on the company's website, reflects Norwegian's vision of becoming the preferred airline in selected markets while prioritizing profitability and delivering dividends to its shareholders.

Several historical events have had a significant impact on the share price of Norwegian. These events include:

Expansion and growth: Norwegian's rapid expansion into new markets and the introduction of long-haul flights to destinations like the United States and Asia generated considerable investor interest. Positive announcements regarding route expansions, partnerships, and fleet expansion have historically influenced the company's share price.
Financial challenges and restructuring: Norwegian faced financial difficulties, including a high debt burden, which adversely affected investor confidence. The company implemented several restructuring initiatives between 2018 and 2020 to improve its financial position. News related to financial restructuring, debt reduction, or successful cost-cutting measures has impacted the share price.
Fuel price volatility: As an airline, Norwegian is exposed to fluctuations in fuel prices. Significant changes in oil prices may affect the company's profitability and operating costs, which in turn may impact its share price. Investors closely monitor oil price movements as they may have a direct correlation with Norwegian's financial performance.
COVID-19 pandemic: The global pandemic had an unprecedented impact on the aviation industry, including Norwegian. Travel restrictions, lockdowns, and reduced passenger demand led to a severe decline in revenue and disrupted operations. The pandemic-related events, such as government-imposed travel bans and airline industry shutdowns, significantly affected Norwegian's share price.
Industry-specific factors: Developments in the broader aviation industry may influence Norwegian's share price. This includes factors such as changes in regulations, competitive landscape, technological advancements, and geopolitical events. Industry-wide events, like mergers and acquisitions or major airline bankruptcies, may have a spill-over effect on Norwegian's share price.

Pros	Cons
Potential for profit: There is an opportunity, if informed trading decisions are made, there is a potential to earn a profit by buying and selling Norwegian Airline shares.	Risk of loss: Trading stocks, including Norwegian Airline shares, comes with the risk of losing money. Share prices can fluctuate unpredictably due to various factors such as economic conditions, industry trends, or company-specific issues.
Volatility: Norwegian airline shares have historically exhibited significant price volatility. This can be advantageous for active traders who can take advantage of price swings and profit from short-term fluctuations.	Company-specific risks: Norwegian airline faced significant financial challenges in recent years leading the company to file for bankruptcy protection. Such risks can impact the value of their shares.
Market liquidity: Norwegian Airline shares are traded on major stock exchanges, providing relatively high liquidity. This means that it's usually easier to buy or sell shares at desired prices without significantly affecting the stock's value.	External factors: The aviation industry is susceptible to external factors such as fuel prices, geopolitical events, and global economic conditions. These factors can have a significant impact on Norwegian Airline's share price, and as a trader, it is considered that you stay informed and consider the risks.
Industry exposure: Trading Norwegian airline shares can give you exposure to the aviation industry, allowing you to potentially benefit from positive developments in the sector.

Here are the steps to trade Norwegian airline shares:

Research and analysis: Start by conducting thorough research on Norwegian airline and the aviation industry. Analyze the company's financial performance, competitive positioning, growth prospects, and any recent news or developments that may impact the stock price. Consider using fundamental and technical analysis techniques to make informed trading decisions.
Choose a trading platform: Select a reliable online trading platform or brokerage that offers access to the Norwegian airline shares. Look for platforms that provide competitive pricing, user-friendly interfaces, research tools, and reliable execution of trades. Ensure that the platform is regulated and offers the necessary features and functionality for your trading needs.
Open a trading account: Follow the account opening process on the chosen trading platform. This typically involves providing personal information, verifying your identity, and agreeing to the terms and conditions. You may also need to deposit funds into your trading account to have capital available for trading.
Determine your trading strategy: Decide on your trading strategy based on your research and risk tolerance. Determine whether you want to engage in short-term trading (such as day trading or swing trading) or if you have a long-term investment approach. Define your entry and exit points, set stop-loss and take-profit levels, and establish the amount of capital you are willing to risk per trade.
Place a trade: Once your trading account is set up and funded, you can proceed to place a trade. On the trading platform, search for Norwegian Airline's stock ticker symbol (e.g., NAS:NAS) and select the appropriate market (e.g., Oslo Stock Exchange). Choose whether you want to buy or sell the shares and enter the quantity you wish to trade.
Monitor and manage your trade: After executing a trade, closely monitor the price movements of Norwegian Airline shares. Keep track of any news or market developments that may impact the stock price. Consider using stop-loss orders to automatically close a position if the price moves against you beyond a certain level. Regularly evaluate your trades and adjust your strategy as needed.
Exit the trade: Once your trade reaches your predetermined exit point or if market conditions change, it may be time to close your position. You can sell the shares on the trading platform by following the same process as placing a trade but selecting 'sell' instead. Review your trading performance and learn from both successful and unsuccessful trades to improve your future trading decisions.

Please note: The trading process may vary slightly depending on the trading platform you choose and the specific rules and regulations of your country or region. It's important to familiarize yourself with the platform's features and trading guidelines before executing any trades. Additionally, consider seeking guidance from a financial advisor or professional if you are new to trading or require personalized advice.

FAQs

Q: What is Norwegian Airline's stock symbol?

A: Norwegian Airline's stock symbol varies depending on the stock exchange. For example, on the Oslo Stock Exchange, the ticker symbol is NAS. On other exchanges, such as OTC (Over-the-Counter) markets, it may have different symbols.

Q: Where can I buy or trade Norwegian Airline shares?

A: They can be bought or traded through online brokerage platforms that provide access to the stock exchanges where Norwegian Airline is listed. Examples include major brokerage firms and online trading platforms such as Skilling.

Q: Has Norwegian Airline stock ever been listed on the U.S. stock market?

A: No, it has not been listed on the U.S. stock market like the New York Stock Exchange or US 100. However, it may have been available for trading on OTC markets in the U.S.

Q: What factors can affect the price of Norwegian Airline shares?

A: The price of the shares can be influenced by various factors, including the company's financial performance, industry trends, oil prices (as it affects operating costs for airlines), competition, regulatory changes, geopolitical events, and overall market sentiment.

Q: Is it a good time to invest in Norwegian Airline shares?

A: Determining the right time to invest in any stock, including Norwegian Airline shares, depends on individual circumstances and preferences. It's important to conduct thorough research, analyze the company's fundamentals, assess market conditions, and consider your risk tolerance before making any investment decisions.

Q: What are the risks associated with investing in Norwegian Airline shares?

A: Investing in Norwegian shares carries several risks. These include company-specific risks such as financial difficulties or bankruptcy, industry risks related to the aviation sector, economic risks that affect the overall market, and unforeseen events that can impact the stock price.

Q: Can I receive dividends from Norwegian Airline shares?

A: They suspended its dividend payments in recent years due to financial challenges. However, dividend policies can change, so it's essential to stay updated with the company's announcements and financial reports.

Q: How can I stay informed about Norwegian Airline's stock performance?

A: To stay informed about the stock, you can monitor financial news websites, subscribe to relevant newsletters, follow reputable financial analysts, and use online brokerage platforms that provide real-time stock quotes and news updates.

Not investment advice. Past performance does not guarantee or predict future performance.

Do not stop learning about the financial markets

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