Norwegian has placed an order for 50 Boeing B737MAX-8 aircraft, with options for 30 more.
The 50 aircraft are expected to be delivered to Norwegian between 2025 and 2028. This closely corresponds to current aircraft lease expirations. Presently, Norwegian operates a fleet of Boeing B737 aircraft. This entails a limited net increase of the company’s current fleet.
Norwegian says that it intends to finance the outstanding balance of pre-delivery payments through positive cash flow from operating activities. A significant share of the aircraft will be owned by the company, ensuring an optimised and balanced aircraft financing structure. Also, subsequent to the conclusion of these agreements (which is expected by the end of June 2022), Norwegian estimates to record a net gain of approximately NOK 2 billion ($212.6 million).
Svein Harald Øygard, Chair of the Board of Norwegian, said:
This is a landmark deal that sets out a path whereby Norwegian will own a large share of its fleet. This will result in lower all-in costs and increased financial robustness, enabling us to further solidify our Nordic stronghold. The deal also allows us to serve our customers with state-of-the-art aircraft that can run increasingly on sustainable aviation fuel.
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Geir Karlsen, CEO, Norwegian, said:
The overall terms achieved are attractive for Norwegian, and the deal fits well with our long-term fleet strategy and route program. It will enable us to serve our customers with modern fuel-efficient aircraft with the latest technology, significantly reducing our carbon footprint. The deal will also strengthen the company’s equity considerably, further solidifying Norwegian’s financial position.
The Boeing B737MAX-8 is approximately 14% more fuel-efficient compared to the previous-generation aircraft (B737). The airline says that this puts the company on strong footing to achieve its target of reducing emissions by 45% by 2030.
Featured image by Norwegian
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