Norwegian Air Shuttle has reached an agreement in principle with Boeing for the purchase of 50 737 MAX 8 aircraft with options for another 30 aircraft.
The carrier expects to receive all aircraft between 2025 and 2028 with the estimated delivery schedule closely corresponding with the airline’s existing agreements with aircraft leasing companies, according to a press release dated June 22, 2022.
The carrier “intends to finance the outstanding balance of pre-delivery payments through positive cash flow from operating activities,” Svein Harald Oygard, Chair of the Board of Norwegian explained earlier in May 2022.
“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,” Oygard.
The recently finalized aircraft acquisition agreement reflects the airline’s continuously strong commitment to operating a modern and fuel-efficient plane fleet, the carrier said, and is expected to cut fuel costs by around 14%. Based on these calculations, Norwegian estimates that it could achieve its target of reducing emissions by 45% by 2030.
“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,” said Geir Karlsen, CEO of Norwegian.
Norwegian’s recommitment to the Boeing 737 MAX comes after it had threatened to cancel a previous order for 92 aircraft of the type in June 2020, when the aircraft model was grounded across the globe. The carrier filed a lawsuit a month later, accusing Boeing of breaching its contract over the way the manufacturer handled the production and delivery of its aircraft.
Following the new agreement, the airline estimated that it could record a net gain of up to $212 million (NOK 2 billion).