OSLO (Reuters) - Budget airline Norwegian Air (NWC.OL) is in advanced talks for a potential joint venture ownership of aircraft in its fleet that would free up cash for the rapidly growing company, it said on Thursday.
Its comments came after a news agency reported that a joint venture could free up close to $1 billion Norwegian crowns for the airline, which has faced pressures to control costs and shore up its balance sheet.
A Norwegian Air spokesman declined to comment on the Bloomberg report when contacted by Reuters.
Europe’s third-largest budget carrier by passenger numbers is trying to crack the transatlantic market by undercutting established rivals.
The airline, which is offering one-way flights from London to New York for as little as 149.90 pounds ($193), rebuffed takeover advances by British Airways parent IAG (ICAG.L) earlier this year.
Its shares bounced 18 percent to 214 crowns by 1230 GMT from a more than six-month low set on Tuesday, though they remain some 33 percent below their year’s high of 320 crowns.
The group said its 2018 unit cost is now expected in a range between 0.435 and 0.440 crowns, up from previous guidance of 0.425 to 0.430 crowns.
Chief Executive Bjoern Kjos reiterated that growth in Norwegian’s investments would slow and that the company would reap the benefits.
“However, there is no doubt that tough competition, high oil prices and a strong dollar will affect the entire aviation industry, making it even more important to further streamline our operations and continue to reduce costs,” Kjos said in a statement.
The company reported a pretax result of 1.60 billion crowns ($192 million), a 13 percent increase from a year ago but lagging the 1.74 billion expected in a Reuters poll of analysts.
Although overall costs will continue to grow amid a planned 15 to 20 percent capacity expansion in 2019, the company promised savings that will amount to some 2 billion crowns for the year as it seeks to bring down the cost per available seat on its planes.
($1 = 8.3393 Norwegian crowns)
Editing by David Holmes