Air Greenland has made its choice and has reportedly placed an order for the rare A330-800neo. The aircraft will be used to fly from Copenhagen to Greenland, and will replace its aging A330-200. Local media are reporting the deal today, with delivery scheduled for the fourth quarter of 2021.
Air Greenland picks Airbus
Local sources have indicated that Air Greenland has placed an order with Airbus for the relatively unpopular A330-800neo. The order consists of just one of the highly efficient long-range widebodies, which is expected to enter the fleet in 2021.
We previously reported that the airline was weighing up the A330-800neo against the Boeing 787 Dreamliner. Clearly, it has opted to stick with what it knows, choosing the Airbus option to replace its own aging A330-200.
The A330-800neo has been nowhere near as popular as its bigger brother, the -900. The economics of the two planes is a close call, which makes the larger -900 a more sensible choice for the majority of buyers. However, the -800 certainly has its niche, and it appears that niche is right where Air Greenland wants it to be.
Thanks to #AirGreenland for its renewed confidence in the A330 Family with an MoU for one #A330-800 – an aircraft that will efficiently serve the needs of the community by linking Greenland and Copenhagen. pic.twitter.com/B87XrNyUNo
— Airbus PRESS (@AirbusPRESS) January 17, 2020
Why does Air Greenland want an A330neo?
The A330neo will be used to replace the airline’s aging A330-200. The A330 is the only jet the airline operates, using it alongside seven DHC Dash-8-200 turboprops and one helicopter.
The A330-200, registered OY-GRN and carrying the name Norsaq, has been in Air Greenland’s fleet since 2002. Prior to this, it worked before for Société Anonyme Belge d’Exploitation de la Navigation Aérienne, or SABENA for short, before it went bankrupt in 2001.
The airframe is 21.4 years old, so it will be at least 22 by the time it is retired; a good age for any aircraft. CEO of Air Greenland Jacob Nitter Sørensen commented in a media release,
“The timing is right because our current aircraft, Norsaq, is reaching a point where it needs to be replaced. At the beginning of 2022, Norsaq is about to end, so the timing is absolutely perfect with the delivery of a new one in the fourth quarter of 2021.”
The largest investment in its history
Despite only being a one plane order, a small transaction for many major airlines, this is a massive deal for Air Greenland. In fact, it’s the largest investment in Air Greenland’s history!
According to reports, the airline is paying around 30% of the cost itself, and funding the rest of the money via a loan. List price, the A330-800neo is worth 1.7bn Danish krona ($260m), but Air Greenland clearly got a good deal, stating that the figure paid is a ‘three-digit million’ number. CEO Sørensen commented,
“The aircraft will be financed in the usual way. That is, some of the money we pay ourselves, and some of the money we go out to the loan market and find. There are various options for financing within bank loans, leasing companies and other financing options.”
Where will it fly?
According to reports, the A330-800neo will be used on routes from Copenhagen Airport to the new international airports in Nuuk and Ilulissat, which are due to be completed in 2023. Until those airports are built, Air Greenland will deploy it on the current route between Copenhagen and Kangerlussuaq.
Air Greenland Chairman Kjeld Zacho Jørgensen commented that he expects to see double-digit growth in Greenland’s tourism figures once the new aircraft is in service. He said,
“Greenland has an unfulfilled business potential in tourism, which can create both development and jobs. Together with new runways in Nuuk and Ilulissat, we will open Greenland in a whole new way that will increase tourism and create growth.”
What do you make of Air Greenland’s new investment? Let us know in the comments!