August 30, 2018 / 1:49 PM / 24 days ago

Norwegian Air sells 6 Boeing aircraft as part of fleet renewal

OSLO (Reuters) - Norwegian Air (NWC.OL) has sold six Boeing 737-800 airliners as part of fleet renewal plans that could see it sell up to 140 planes.

“The prices are well above the debt on the aircraft,” Chief Financial Officer Geir Karlsen told Reuters on Thursday, without disclosing numbers.

The sales proceeds will be used to repay debt and increase liquidity.

Norwegian Air has a fleet of more than 150 aircraft and has commitments to acquire a further 210 by 2020 as it looks to rapidly expand in Europe and on transatlantic routes.

Its aircraft commitments are worth $12.36 billion (9.50 billion pounds), Norwegian Air said in a June rights issue prospectus.

With an equity ratio at the end of June of just 7 percent, the plan is to ease its commitments going forward.

“We have said we will renew our fleet and sell our oldest aircraft. We have 22 Boeing 737NG and they are a target to be changed with new Boeing 737 MAX aircraft.”

“In addition we have a big order at Airbus which can be used by us or they could be sold or taken out of our balance sheet and leased out.

“In theory we could sell as many as 140 aircraft,” Karlsen said.

Norwegian Air has made huge aircraft orders on favourable terms with Boeing and Airbus, according to Espen Andersen, associate professor at BI Norwegian Business School.

“These orders are taking up a lot of capacity at Boeing and Airbus. Other airlines could be at risk of not getting the aircraft they need.

“Airlines or leasing firms could buy aircraft from Norwegian Air. The leasing firms are very liquid,” Andersen said.

Reporting by Ole Petter Skonnord; editing by Jason Neely

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