As it reports its performance figures for March, impacted by the grounding of its MAX aircraft, Norwegian sells two more 737-800s.
Arctic Aviation Assets, a subsidiary of Norwegian tasked with selling the airline’s assets to raise liquidity, has signed a deal for the sale of two Boeing 737-800 aircraft.
The move is part of the airline’s shift away from rapid growth in an effort to reach profitability. The loss-making carrier aims to sell older planes, replacing them with newer, more efficient models.
The planes to be sold this time are currently being operated by the airline and deliveries will take place late in the third quarter and early in the fourth quarter of this year, the company says in an announcement to the Oslo Stock Exchange.
The transaction is expected to boost Norwegian’s liquidity by US$21 million once the sums contribute to the repayment of the company’s sizeable debt, creating “a positive equity effect”, the carrier says.
The sale’s proceeds will be used exclusively to repay debt, adding to the company’s liquidity.
The move is in line with Norwegian’s strategy over the last six months or so, of selling some aircraft and “capitalising on the scale built up over the last few years and the changed focus from growth to profitability”.
The announcement is in line with a stock exchange statement titled “Norwegian strengthens its balance sheet through a fully underwritten rights issue of NOK 3 billion” (€310 million) on January 29, where sale of aircraft was highlighted as a measure to reduce capital expenditures, in addition to the postponement of aircraft deliveries.
Norwegian still needs aircraft for its summer schedules, however, as 18 MAX aircraft are still grounded until Boeing comes up with software updates, and it is still uncertain when these planes will return to the air.
The airline said last week that it would postpone the sale of six Boeing 737-800s. Meanwhile, Norwegian took delivery of one brand new Boeing 787-9 Dreamliner in March.
Norwegian has also reported its latest performance figures. Passenger numbers rose by another 5.2% in March, to 2,961,840, although it is difficult to draw direct comparison with March 2018 when Easter fell in the last days of that month.
Total traffic growth (RPK) increased by 9%, while the capacity growth (ASK) increased by 11%, bringing the load factor down 1.3 percentage points to 85.4%.
It operated 97.4% of its scheduled flights in March, despite the airline’s Boeing 737 MAX aircraft being taken out of production. The airline combined flights and offered passengers alternative departures. Just over 80% of flights departed on time.
“Despite the fact that our Boeing 737 MAX aircraft were taken out of production this month, the regularity is satisfactory, and the punctuality is up 8.5 percentage points,” said chief executive Bjørn Kjos.
“Our dedicated colleagues here at Norwegian have been working day and night to find solutions for our customers. Those affected by the changes have shown great understanding of a situation that is beyond Norwegian’s control and I would like to thank them for that.”