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The airline’s negotiations with the creditors continue in their entirety. Norwegian has managed to get rid of the huge order for 88 new Airbus aircraft and has also struck a deal with engine maker Rolls-Royce.
Norwegian is approaching an agreement with the owners of the aircraft. Shown here is one of the company’s Boeing jets. Norwegian has owned Airbus aircraft through a subsidiary, but has never used them in its own operations.
INTS KALNINS / Reuters
On Tuesday, it emerged that Norwegian was close to reaching an agreement with Airbus and Rolls-Royce regarding the ongoing rebuilding of the company.
During a court hearing on Wednesday, Norwegian’s attorney, Brian Kennedy, is said to have confirmed that the parties are now in agreement, according to Dagens Næringsliv.
According to the Reuters news agency, the Airbus lawyer confirmed the same.
Therefore, the airline has reached an agreement with Airbus on an agreement regarding the cancellation of a flight order from the aircraft manufacturer. Not all the details of the deal are known.
According to Reuters to the defenders of the Norwegians and Airbus will retain the advance payments that Norwegian and its subsidiary Arctic Aviation Assets have made for the aircraft so far.
In addition, Norwegian will owe Airbus 600,000 pounds, according to the news agency.
Although Norwegian does not recoup the large sums paid in advance, the company avoids large future obligations related to air deliveries.
Airbus: $ 46 million upfront
In total, Norwegian had obligations for future aircraft deliveries in the period 2020-2027 of a total of $ 9.8 billion at the end of 2019, that is, the price of all aircraft that were on order.
By the end of 2019, Norwegian had paid advances for undelivered aircraft totaling NOK 4.95 billion, up from NOK 8.56 billion the previous year.
As the aircraft are delivered, the advances recorded are continuously converted to assets recorded in the accounts.
Airbus’ Benoit De Saint-Exupery has testified in Irish court that Norwegian’s subsidiary, Arctic Aviation Assets, has paid a total of $ 46 million for aircraft that have yet to be delivered, which corresponds to 386 million crowns to current exchange rate.
In the third-quarter accounts, Norwegian stated that it had prepayment loans for new aircraft (with both Airbus and Boeing) totaling NOK 723.3 million.
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No delivery of 88 aircraft
The Airbus deal will be very important for Norwegian, as the company is now working to drastically reduce its fleet to 50 aircraft.
The company has never used Airbus aircraft in its own fleet, but has leased or sold the aircraft it received from Airbus to others.
At the beginning of 2020, Norwegian had 93 Airbus aircraft on order. The company was to receive five A320neo aircraft that year, but two were delayed until 2021. These two deliveries now appear to be non-existent.
According to Airbus’ order book, Norwegian had received a total of 7 Airbus A320neo over the years by the end of January. The company had orders for another 88 aircraft, divided between 58 A320neo and 30 A321neo Long Range.
These 88 orders are now being canceled under the new agreement.
In addition, aircraft engine manufacturer Rolls-Royce has approved the details contained in the new rescue plan. This means that the company receives about five percent of the requirements, mainly in the form of new shares.
E24 wrote Tuesday that leasing company Aercap is no longer protesting the offer that has been made, but that it still has objections to the “order.” These objections, Aercap’s attorney Rossa Fanning will return to Friday, she said Wednesday, according to DN.
P.S! Norwegian will publish its latest quarterly report on Friday.
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