Norwegian Air Shuttle’s Irish leasing arm, Arctic Aviation Assets (AAA), has reached an agreement with Airbus for the rescheduling of part of the lessor’s order book, including both A320neos and A321LRs, the Oslo-based company said Wednesday without providing details on the number of aircraft concerned. The postponement of the deliveries comes as part of the low-cost carrier’s ongoing efforts to strengthen its financial footing and change its strategic focus from growth to profitability. The restructuring also includes plans to divest all or part of AAA through a joint venture.
Earlier this year, Norwegian’s CFO chief financial officer and deputy CEO Geir Karlsen revealed that the Toulouse-based aircraft manufacturer was taking part in talks to form a joint venture between the lessor and an unidentified Asian company. Speaking during a full-year earnings presentation with analysts February 7, Karlsen stressed that discussions to form a leasing joint venture with a “very strong Asian company” had progressed and the parties had signed a letter of intent. “The discussions are now involving our whole Airbus order book,” he said. “There are now three parties sitting around the same table. This is the reason why it is taking a bit longer than we wanted.” Norwegian on Wednesday gave no update on the planned JV.
At the end of March, Airbus held unfulfilled firm orders from Norwegian for 63 A320neo and 30 A321neo jets, according to the OEM’s latest orders and deliveries overview. The overview also showed that AAA ordered and took delivery of seven A320neos.
The new deal follows an earlier agreement with Airbus to postpone delivery of four A321LRs from 2019 to 2020 and with Boeing to delay delivery of twelve 737 Max 8s from 2020 to 2023 and 2024. In a January update to investors, Norwegian said it planned to take delivery of five Boeing 787-9s and 18 Max 8 jets for its own operations this year. Although the Max grounding has affected the LCC’s operations—its fleet includes 18 of the narrowbodies—it also could create room to negotiate advantageous terms on additional postponements of its outstanding orders with Boeing, ICF’s head of aviation Samuel Engel told AIN.
Norwegian expects the new agreement with Airbus will reduce its capital expenditure commitments by some $570 million in total for 2019 and 2020.