Norwegian Air Shuttle and Boeing have agreed to a recommitment to purchase 50 Boeing 737 MAX 8 aircraft.
The order covers 50 firm orders and 30 options, which will mark a change for the airline. Previously, the airline majority leased their aircraft – this time, they’re buying them.
The purchase of these aircraft will yield a net increase based on the airline’s current fleet. The agreement in principle is subject to various closing conditions, which are targeted to be concluded by the end of June 2022.
Norweigan Air Shuttle 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. Subsequent to the conclusion of these agreements, Norwegian estimates they will record a net gain of approximately NOK 2 billion.
In Quotes
Svein Harald Øygard, Chair of the Board of Norwegian.
“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,”
Geir Karlsen, CEO of Norwegian added
“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,”
Moving back to purchasing
In recent times, the airline has been forced to lease its fleet to keep itself afloat – which forced a massive reorganisation of the company.
This move marks the move for Norweigen for owning its own fleet – which it sees as a benefit with it seeing a lower total cost of ownership.
For the airline, it resets its path to the future – and hopefully better terms with its suppliers.
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