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Norwegian Air strikes ‘landmark deal’ to acquire 50 new aircraft

Norwegian Air has secured a “landmark deal” to acquire 50 new generation Boeing 737 MAX 8 aircraft. 

The Scandinavian budget carrier announced an agreement in principle with Boeing for a “recommitment to purchase” including options for an additional 30 aircraft.

The 50 Max 8s are due to be delivered between 2025 and 2028, at a schedule closely corresponding to current aircraft leases expiring. 

A limited net increase of the company’s current fleet will result. 

“The parties’ agreement in principle is subject to various closing conditions, which are targeted to be concluded by the end of June 2022,” Norwegian said.

The airline plans 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,” Norwegian said. “Subsequent to the conclusion of these agreements, Norwegian estimates to record a net gain of approximately NOK 2 billion.”

The airline’s chairman Svein Harald Шygard 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,”

The Boeing 737 MAX 8 is about 14% more fuel-efficient compared to the previous-generation aircraft, putting the company on “strong footing” to achieve its target of reducing emissions by 45% by 2030.

Chief executive Geir Karlsen added: “The overall terms achieved are attractive for Norwegian, and the deal fits well with our long-term fleet strategy and route programme. 

“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 airline agreed a deal in February to lease ten 737 Max 8s with delivery next spring of 2023 and was last month in the process of leasing five more to meet 2023 requirements. This would bring the fleet to 85 aircraft for summer 2023, up from 70 this summer.

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