) jets, sending its shares sharply higher on hopes that the low-cost carrier can avoid becoming the latest in a series of airline collapses.
Under a long-awaited joint venture, Norwegian will sell its A320 NEO planes on order from Airbus to a new leasing company 70% owned by China Construction Bank , generating a much-needed cash profit on each aircraft due in 2020-2023. European airlines are braced for a tougher-than-usual winter marked by weakening demand and higher dollar-denominated fuel costs - factors that have already contributed to bankruptcies including Thomas Cook’s failure last month.
Norwegian has also been punished by problems with Rolls-Royce engines on Boeing’s 787 and the grounding of its 737 MAX after two deadly crashes with other operators - forcing their substitution by less efficient models on expensive leases.Norwegian’s net income was up 28%, beating the 1.47 billion crowns expected by analysts, according to a Refinitiv poll.
While the company cannot rule out another share issue, Smedegaard told Reuters, “it’s not our main focus.” More planes are likely to be transferred to the leasing venture in future, Norwegian said. The 27 Airbus aircraft earmarked so far will save $1.5 billion in capital expenditure, helping to reduce its 61.7 billion crown debt.
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Source: Reuters - 🏆 2. / 97 Read more »
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