LONDON (Reuters) - Budget airline Norwegian Air (NWC.OL), which is in talks with an unnamed partner on a fleet joint venture, plans to provide an update on the deal before the end of the year and has “many interested parties”, its chief financial officer said.
“The aim is to find a partner that can take a bit of equity. Norwegian doesn’t necessarily have to be a majority shareholder in that JV,” Geir Karlsen told reporters in London on Tuesday.
Shares in Norwegian surged last week after it confirmed that it was in advanced talks with an unnamed partner on a deal to create a new partnership to fund aircraft it has on order, a deal which would help free up cash.
“Hopefully we will be able to come to the market with more news on that transaction, structure, before the new year.”
Europe’s third-largest budget carrier by passenger numbers has grown rapidly, undercutting established trans-Atlantic carriers and overtaking British Airways as the biggest non-U.S. long-haul airline in and out of New York this summer.
But fast growth has left it under pressure to control costs and shore up its balance sheet.
The potential JV deal for up to 140 planes it has on order with Airbus (AIR.PA) and Boeing (BA.N) could help raise $960 million for Norwegian according to reports, with Karlsen saying that there were no guarantees but confirming he was optimistic.
Karlsen also said that Norwegian was focussed on improving its performance over the winter months, typically the most difficult time for European airlines as fewer people fly.
“You will see us doing changes in the fleet programme for the winter and we are planning to do that very shortly.”
The CFO said he had not been involved in any discussions around two takeover approaches made earlier this year by British Airways-owner IAG (ICAG.L) to Norwegian, both of which were rejected, as they had been handled at board level.
His focus for now was on bringing down the cost per available seat on its planes despite rising fuel prices.
“We are struggling with high oil prices as many other players are. That’s hitting us, we are hedged today slightly above 20 percent for 2019. In hindsight we’d like to have been more hedged,” he said.
Norwegian faces is also affected by problems with Rolls-Royce (RR.L) engines used on Boeing 787 jets which has left some planes grounded, making it hard to plan capacity, Karlsen added.
Reporting by Sarah Young; editing by Kate Holton and Alexander Smith