Norwegian again in love with the Boeing MAX 8 » AirInsight

Almost two years after canceling a huge order for 92 aircraft, norwegian air recommitted to the Boeing MAX 8. The carrier said on May 30 that it had agreed in principle to order fifty aircraft plus options for thirty. The deal is expected to be completed by the end of June. Norwegian again in love with the Boeing MAX 8.

The fifty aircraft on firm order will be delivered between 2025 and 2028. Their arrival will be close to the release schedule of the 737-800s when their leases expire. This means the net fleet size will remain at the current level, says Norwegian, which will be around seventy this summer. The airline said in February that its short-term strategy called for a fleet expansion of between 95 and 100 planes by 2024.

The recommitment to the MAX 8 confirms that Norwegian has a strong interest in the type on which to build its future fleet. The current fleet is based around the 737-800 and consists of only three MAX 8s. As of June 2020, it had taken delivery of eighteen MAX 8s. The decision to cancel the remaining 92 aircraft on order was made when Norwegian – like many airlines – was forced to drastically restructure following the Covid epidemic. Most MAX aircraft have been returned to their lessors.

Since then, Norwegian has restructured its debts and changed its business model. It ended its low-cost long-haul operations with Boeing 787s to focus solely on rebuilding a network, first in Norway and now in Europe, serving key cities and seasonal destinations. For this reason, the airline has canceled orders for more 787s as well as 63 Airbus A321neos and 30 A321XLRs.

After the gradual and successful rebuilding of its operations since 2021, Norwegian is once again considering sourcing new aircraft. After considering options that still included the A321neo, it signed a lease agreement for ten MAX 8s with AerCap which sees the aircraft joining the fleet in time for the 2023 summer schedule to bring the fleet to some 85. devices. The aircraft under the purchase agreement complement those leased and will give Norwegian a fleet of fuel-efficient aircraft that will help reduce fuel costs and emissions.

Financing by operating activities

Norwegian says it will finance pre-delivery payments for the new aircraft with positive cash flow from operating activities, so it will not seek new loans that would increase its debt position. “A significant share” will belong to the airline, leaving sale-leaseback on the table as an alternative.

“This is a landmark agreement that charts the course by which Norwegian will own a large portion of its fleet. This will result in lower overall costs and increased financial strength, allowing us to further consolidate our northern stronghold. The agreement also allows us to serve our customers with state-of-the-art aircraft that can increasingly run on sustainable aviation fuel,” said Svein Harald Oygard, chairman of the board, in a press release.

CEO Geir Karlssen added: “The overall terms achieved are attractive to Norwegian, and the agreement fits well with our long-term fleet strategy and route program. This will allow us to serve our customers with modern aircraft that are fuel efficient and equipped with the latest technology, significantly reducing our carbon footprint. The deal will also significantly strengthen the company’s equity, thereby strengthening Norwegian’s financial position.

The media statement did not include details of the legal dispute the carrier was still in with Boeing over the termination of the 787 order and compensation for the original order’s MAX delays.

Richard Schuurman

Active as a journalist since 1987, starting with the regional newspaper Zwolse Courant. Grand Prix reporter in 1997 at the Dutch monthly Formula 1, general reporter Lelystad/Flevoland at De Stentor/Dagblad Flevoland, from 2002 to June 2021 reporter/radio/tv presenter with Omroep Flevoland.
Since mid-2016 freelance aviation journalist, since June 2021 entirely dedicated to aviation. AirInsight reporter/editor since December 2018. Contributor to Airliner World, Piloot & Vliegtuig. Twitter: @rschuur_aero.

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