Norwegian reduces debt by billions

(Finansavisen 🙂 On Friday it was announced that Norwegian Air Shuttle had signed an agreement to sell five Airbus 320 neos.

The aircraft, currently leased to HK Express, represent more sales earlier this year.

In a short time, Norwegian sold 13 aircraft and received over a billion crowns after repaying its debt.

"Taken in isolation, sales of the latest aircraft will have an exclusively positive impact on the book value," says analyst Kenneth Sivertsen of Pareto Securities for Finansavisen.

According to Norwegian, the sales of the five aircraft, which will be delivered during the quarter, will improve the company's cash flow by $ 62 million, or about 515 million NOK.

– The debt is reduced by 1.5 billion.

The money from the sale will be used to pay off the debt and increase the cash. According to Sivertsen, airline sales resulted in a NOK 1.5 billion reduction in Norwegian debt, which amounted to NOK 31.5 billion.

Axel Jacobsen, an analyst at Arctic Securities, shares his enthusiasm for selling aircraft.

"We are pleased that Norwegian is selling planes, as this will increase liquidity and reduce debt." The company itself said it would develop with the market over short distances and, by reviewing the backlog of According to the company, it was indicated on the cards that airline sales would be announced, which is also in line with the company's strategy to eliminate the older Boeing 737, he said.

Norwegian thinking can make things difficult for the winter

Although the company is now selling its flights, Pareto Securities worries about the historically difficult winter season.

"Norwegian is one of the European airlines with the lowest proportion of fuel fuses." According to Sivertsen, a higher oil price will put significant pressure on margins and affect results.

– Need

"A virtue of necessity," says Jan Petter Sissener in Hegnar.no about the sale, but it seems odd that Norwegians say anything about a possible profit on the sale.