Norwegian To Sell Used 737’s To Reduce Debt

Norwegian is set to attempt to sell a number of its aircraft, both new and old.

Norwegian is an airline which offers cheap fares across Europe and North America. The airline recently gained media notoriety when it operated a wet lease A380 to operate its London to New York route. In contrast, the airline is now operating a leased Wamos A330 aircraft on the route. This means passengers booked to fly on a 4 star airline may in fact travel on a 2 star airline. Interestingly, despite their lack of serviceable B787 aircraft meaning the wet leases are required, Norwegian is looking to sell aircraft.

Norwegian 787
Norwegian currently operates a fleet of over 150 aircraft. Photo: Norwegian

Which Aircraft?

Norwegian is reportedly looking to sell two types of aircraft it has. The first is used B737 aircraft. While the airline currently flies the B737-800 and the B737 MAX 8, the aircraft has also historically flown the B737-300 in addition to a B737-400 and a B737-500.

In addition to the B737 aircraft, the airline is also looking to sell some of its A320s. The A320s haven’t actually been manufactured yet, meaning that Norwegian is looking to sell the purchase rights to them. In fact, Norwegian previously purchased the rights to 3 of Icelandair’s B787 aircraft on order.

Norwegian are currently wet leasing aircraft to cope with B787 engine issues. Photo: Norwegian

Chief Financial Officer Geir Karlsen told an investor presentation “We have 90 neos (A320neo) from Airbus on order. The Airbus 320neos are for all practical purposes for sale. We have started a process where we will try to find a new home for those aircraft”. Karlsen went on to show that Norwegian doesn’t think there is a lack of demand for these aircraft. “The problem is not to sell them … but to get the price we want … Hopefully by the end of the year we should be able to disclose news on a transaction”.

It is estimated that despite these expected sales, Norwegian’s fleet will still grow by the end of the year. Currently at more than 150 aircraft, the airline expects to be operating 164-165 aircraft by the end of the year. This is due to the 210 aircraft which the airline has committed to acquire by 2020 from both Airbus and Boeing.

Norwegian To Sell Used 737’s To Reduce Debt
Norwegian is looking to sell old B737 aircraft as well as orders for A320 aircraft. Photo: Norwegian

Why is Norwegian Selling Aircraft?

The airline is looking to sell these aircraft to reduce its debt. Last year Norwegian’s net debt was 11.2M NOK. This equates to roughly 1M GBP. Despite the sale, the airline is reportedly looking to keep the 30 long range A321s it has on order. In mid October, Norwegian’s Argentinian subsidiary will take flight. The airline plans to have 4 aircraft in Argentina by the end of the year.

Karlsen said “We are pretty excited about what we are doing in Argentina and depending on how that goes we will decide on the solution on the Airbus 321 and will possibly move some of them to Argentina”.

Whether Norwegian sell the aircraft for the price they want is yet to be seen, however, the launch or Argentinian services could prove to be a boon for the airline.