Norwegian to sell five planes to ease debt

Norwegian to sell five planes to ease debt

Norwegian Air has agreed to sell five Airbus 320neo aircraft, as a part of its plan to ease capital commitments and strengthen its balance sheet.

The aircraft, which will be delivered in the fourth quarter of 2018, are currently leased out and not operated by Norwegian Air, the company said. “Sale proceeds will be used to repay debt and to increase the company’s liquidity,” Norwegian Air said. Liquidity is expected to increase by $62m (€54.5m), after the repayment of debt, it said. Norwegian Air has committed to buying 210 new aircraft from Boeing and Airbus, by 2020, and has said as many as 140 planes could be sold over time, as a part of the renewal of its fleet and to reduce debt.

Norwegian Air said, last week, it is in advanced talks with an unnamed partner on a fleet joint venture and hopes to give more information before the end of the year. Europe’s third-largest budget carrier, by passenger numbers, has grown rapidly, but fast growth has left it under pressure to control costs and shore up its balance sheet. Meanwhile, Willie Walsh, chief executive at IAG, which owns Aer Lingus and British Airways, said there was nothing new to say, when asked about the possibility of a further bid for low-cost carrier Norwegian, adding that its short-haul network continued to look attractive.

Norwegian rejected two approaches from IAG earlier this year. IAG owns a stake of just under 5% in Norwegian.

“I’ve nothing new to report. We continue to watch, we continue to have an interest, but, as I’ve said before, the interest wanes over time and we’ll wait and see,” Mr Walsh told investors.

Reuters

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