Norwegian, Oslo-based airline of Norway, has consented to expand its fleet size by leasing up to 13 more Boeing 737-800 aircraft on ‘favorable terms’ in anticipation of high passenger demand in the upcoming summer of 2022. The budget airline Norwegian has experienced high ticket sales and a steady rise in passenger flights following the government’s removal of pandemic control measures on travel, prompting the airline to selectively add to its growing aircraft fleet. The delivery of leased aircraft is slated to start in the fourth quarter of this year, i.e., 2021 and through 2022’s first quarter. As Norwegian said in a statement, the aircraft lessors haven’t been publicized yet, though they have many years of experience and have a prior relationship with the airline.
Norwegian recently reopened its bases at Bergen, Stavanger, and Trondheim, which had witnessed no or little air service activity and closed in November 2022. In early October, the airline CEO Geir Karlsen had also stated to grow the Norwegian aircraft fleet to between 60 and 70 by the next summer to cater to the rising demand.
The aircraft will be leased for 5 to 8 years, varying according to the age of the jets to be operated on a power-by-the-hour basis for both current and 2022/23 winter seasons. Such terms will give the low-cost airline the necessary flexibility to adjust the activity up and down quickly and effectively to manage the capacity through the offseason.
Norwegian also said that it would reserve the right, under some of the leases, to replace Boeing Max aircraft in favor of new-technology narrowbody airplanes from either of 2 aerospace giants Boeing or Airbus. Such conditions will allow Norwegian to operate new and fuel-efficient fleets in Europe to offer environmental-friendly travel options for travelers.
Profitable business for Norwegian in the third quarter
Norwegian reported profitable operation in the third quarter of 2021, amounting to the net profit of NOK 169 million, which in the same period 2020 had amounted to the loss of NOK 980 million. The positive financial results of the third quarter resulted from actions taken by Norwegian by centering on cost-efficiencies while reducing debt and liabilities.
The third quarter saw the passenger movement close to 2.5 million with Norwegian and a positive trend in forwarding bookings month on month. Norwegian also unveiled passengers’ well-reaction to its post-restructuring focus on routes in the Nordic countries and within Europe prompted by the opening-up of destination country’s restrictions.
In September, Norwegian transported a total of 977,719 travelers operating an average of 46 airplanes with a load factor of 72.4%.
In October, Norwegian transported a total of 1,203,205 passengers, and the load factor was 82.7%. The company’s continued cost control and low-cash burn have helped it enter into traditionally challenging winter months with a strong financial position amounting to NOK 7.6 billion in cash and equivalents. It was the first time that the passenger figure topped 1 million in a month since the outbreak of the COVID-19 pandemic. The devastating pandemic pushed Norwegian to the verge of collapse and near-death experience.
Norwegian reported the continued positive increase in passenger traffic the previous month as demand strengthened across the network. As more people plan and start to return to the traditional booking patterns, the carrier continues to ramp up operations by reopening bases and leasing more aircraft on flexible terms.
Norwegian’s bitter past and future plans
The onset of the coronavirus pandemic proved to be devastating for Norwegian in terms of passenger revenue and flight operations. The airline had to deal with bankruptcy slashing its business and terminating its transatlantic network. Since then, the carrier has lowered its flight services to center itself on domestic operations and a handful of Nordic routes. The airline’s fleet plunged to 51 aircraft from around 160 that thrashed its financial revenue. But now, the rebounding air traffic has stimulated the airline to rebuild its European network. The rapid vaccinations and lifting of travel restrictions leveled up the bookings; the company is optimistic about continuing the ramp-up plans in the fourth quarter, operating around 70 short-haul jet planes in 2022.
Founded in 1993, Norwegian started its journey as a budget carrier with Boeing 737 jet in 2002 to offer affordable fares and values for the customers. At first, the Norwegian brand operated short-haul services across Europe, which then leveled up to offer long-haul services in the US, Asia, and South America. The airline intends to fortify the Nordics providing vital air links benefitting leisure, business, and trade industries.