Low-cost carrier Norwegian has agreed a joint venture deal with China Leasing International Corporation (CCBLI), which will “finance, own and lease aircraft that Norwegian has on order”.
The agreement – which will initially cover 27 A320 neo aircraft due to be delivered between 2020 and 2023 – will see CCBLI own a 70 per cent share in the venture, with Norwegian holding the remaining 30 per cent.
CCBLI, which is a subsidiary of China Construction Bank Corporation, will also provide financing for the aircraft within the joint venture.
Norwegian said the move would reduce its committed capital expenditure by around US£1.5 billion, based on the initially 27 aircraft in the agreement.
The carrier has seeking to form a joint venture for aircraft ownership for some time, and acting CEO Geir Karlsen said that “The JV is one of many important initiatives that need to be realized to deliver on our strategy of moving from growth to profitability”.
“I am convinced that CCBLI with its professionalism, financial strength and capabilities will be an excellent partner for Norwegian going forward,” added Karlsen. “This JV is an important first step in building a strong strategic partnership between our two companies.”
Meanwhile Norwegian also today announced its “best ever quarterly result”, with a 38 per cent increase in third quarter pre-tax profits compared to last year, at NOK 2.2 billion (£187 million).
In recent months the carrier has been focusing on optimising its network, with plans to switch frequencies on several transatlantic routes next year.
Last week Norwegian also announced a Letter of Intent to launch an interline partnership with Jetblue, on flights between Europe and the Americas.
The partnership would connect more than 60 US and nearly 40 Caribbean and Latin American cities to Norwegian’s network via New York JFK, Boston and Fort Lauderdale, allowing customers to book connecting flights to and from Jetblue services under a single ticket, with luggage being through-checked to the final destination.
The US is now the largest market in terms of revenue for the airline, and commenting on the results Karlsen said:
“Norwegian’s third quarter results show that we are delivering on our strategy of moving from growth to profitability.
“We are delivering record-high earnings, record-high operating revenue and reduced unit cost, even when hit by operational issues outside of our control.
“I would also like to commend everyone at Norwegian for contributing to delivering on our cost-reductions.”