LONDON – Norwegian Air has announced plans to purchase 50 Boeing 737 MAX 8 aircraft, with options for an additional 30.
It is understood that the aircraft will be delivered between 2025 and 2028, due to schedules closely corresponding to current aircraft lease expirations.
Executive Comments…
Commenting on the news was 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”.
Also commenting on the news was Geir Karlsen, CEO of Norwegian:
“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”.
Consolidated Growth…
This news from Norwegian is not that surprising, given the comments from CEO Karlsen at Routes Europe in Bergen last week.
Norwegian is looking to increase its fleet to 100 aircraft within two years.
“We have an organization at Norwegian where we can probably run close to 100 aircraft, with the same staff,” Karlsen said.
“That’s why I think the sweet spot today is 90- to 100-aircraft and we would like to get up there as soon as possible.”
In what is probably a first, Karlsen went as far as admitting that the growth plans Norwegian had pre-bankruptcy were too aggressive:
“Back in 2017, 2018, and 2019, we had a lot of aircraft coming our way, meaning too many deliveries, both on narrowbodies and on widebodies as well.”
“The growth was too aggressive, way too aggressive. This time, we have the luxury of actually growing into demand.”
This would suggest the view that Karlsen is making this decision for fleet expansion carefully, as he doesn’t want the airline returning to the same position it was in last year.
Long-Haul Flights Not On The Agenda…
Karlsen also did confirm at Routes Europe that long-haul flights are not on the agenda for the airline to expand.
This definitely generates the view that the airline has learned its lesson from expanding so rapidly in this segment of the market, especially when you have a plethora of other airlines competing in the same space.
Instead, the fleet expansion is going to focus on Karlsen’s plan for growth outside of the Nordics, particularly with a focus on Gatwick, Germany, and Spain.
As reported by RoutesOnline, around 15 Boeing 737 MAXs will be delivered to the carrier next year, and are going to form a path of evenly spread operations.
Overall…
From the coverage coming out of Routes Europe regarding this, it remains clear that Karlsen is the right person to captain the ship that is Norwegian.
It’s also quite obvious that Norwegian is learning from the mistakes it has made and is only creating expansion plans that they know will actually be sustainable.
This view is going to be very refreshing for the carrier and the staff that work there, as they know that considerable job security is there on the table.
The Summer 2022 season is going to be an important one for the carrier, as this could definitely tip them to the edge of profitability.
And this will be relatively easy, especially as they are only chasing up on a £7m loss, which by their standards, should be definitely more than achievable.
