Nixse
0

Norwegian Air Signs A Huge Joint Venture

The other day, Norwegian Air was reported to sign a new joint venture deal with China Leasing International Corporation. The project will significantly reduce the company’s capital expenditure.

Moreover, the two firms will share ownership of 27 Airbus A320neos. Currently, they are due to be delivered to the company between 2020 and 2023.

China Leasing International Corporation said specifically that it would “finance, own and lease aircraft that Norwegian has on order.”

The said company will own a 70% stake in the leasing venture. Meanwhile, it will own the remaining 30%.

In total, the transaction will see the company lessen its capital expenditure by more than $1.9 billion.

Over the last few years, the airline has appreciated a quick period of development. This let it become one of the vital players in the European low-cost air travel market.

On the flip side, some of the difficulties related to such rapid growth do finally look as if it has to have engrossed with the airline.

Capitalization of Norwegian’s Scope

Norwegian Air capitalized deeply in enhancing the size of its fleet, but it has overstretched itself in the process.

Recently, it has made several moves that indicate a change in its business strategy. But it is away from development towards stability and profitability.

Way back in August, the company sold its stocks in Norwegian Finans Holding for $254 million.

The corporation is a profitable financial services firm. It goes with a customer base of 1.6 million. This is for the sale of shares to show that Norwegian is currently arranging liquid cash.

Earlier this month, the revelation of Norwegian eliminating 5 Airbus A320 orders from its total order of 63 happened.

However, it is still not clear what is happening precisely to these orders.

Meanwhile, some stated they were transferred to another buyer, and that is possible.

A couple of weeks later, disclosure of Norwegian’s plan of selling five Boeing 737-800s also arose. The selling would be to China Aircraft Leasing, for a total of $50 million.



You might also like
Leave A Reply

Your email address will not be published.