Norwegian management will significantly shrink the fleet to save the company. In October, two large Dreamliner aircraft disappeared from the fleet. Several aircraft are now moving, but Norway has not yet escaped the leases and bills completely.
On Thursday, Norway presented the key points in the second rescue package that the company will now operate under Ireland’s bankruptcy protection.
The company adopted a first rescue package in May, which reduced its debt and triggered loan guarantees to three billion Norwegian states.
In the long-awaited second rescue package, the equine cure that the company believes is needed to survive: Debt will be reduced even more, the fleet will get reduce it and even more fresh capital will be raised.
On Monday, Norway must persuade Irish judge Michael Quinn to approve the company’s application for bankruptcy protection and the company’s plan for survival.
How many airplanes Norway wants in the future, and how much they manage to dispose of, is a key piece in the financial restructuring puzzle now being installed.
For every single aircraft that disappears, whether owned or leased, Norway’s debt and leasing obligations shrink by significant amounts.
In addition, the company saves ongoing large operating and maintenance costs on aircraft that are currently of little use.
Norway’s new crisis plan: It will raise up to 4 billion in fresh money
Looking for new airline customers
Even before the corona, Norway had begun selling older short-haul aircraft of the 737 NG type, to adjust the company to lower growth and to bring in cash.
In August, Norwegian commanders announced that nearly half of the 37 long-distance aircraft (787 Dreamliner) were to leave the fleet – somewhere between 15 and 17 aircraft.
However, the pandemic has meant that the need and value of second-hand aircraft has suddenly been significantly reduced.
The CEO of Aengus Kelly of leasing giant AerCap, which owns several Norwegian aircraft, recently described how the aviation market completely stopped this spring.
Over the summer and autumn, however, the market has started to move again. In October, AerCap took back two Norwegian Dreamliner 787-9 aircraft and leased them to Italian tour operator Neos.
This was the first time a Dreamliner aircraft had left Norwegian.
Kelly pointed out that the remaining 787s leased to Norwegian are also “currently being marketed” to other potential customers.
The same is happening with other leasing companies and with Norwegian itself, in a bid to see if anyone else needs the planes that Norway itself no longer wants.
Work to make Norwegian “unstable”: – Debt will fall
Flights are flown “home” to Ireland
During AerCap’s quarterly presentation, the CEO described what they did when the aviation market was almost frozen:
They chose to leave the planes with airlines that were struggling financially, as long as they were able to store, maintain and maintain their operating certificates.
After two aircraft were dispatched from a store at Oslo Airport to Italy in October, things have started to happen again in the last month:
E24 / Aftenbladet has received suggestions that several Dreamliner aircraft have recently left Sola airport, which has been one of the “parking spaces” that Norwegian has used during the Corona crisis.
E24 / Aftenbladet originally observed 26 Norwegian planes parked on Sola this summer, 11 of which were 787 Dreamliner.
How much is now unclear, but according to the Norwegian CFO, several stored aircraft have been moved.
– Have AerCap or other leasing companies taken back more aircraft since the two in October?
– It is publicly known that we have returned two aircraft to AerCap. As for the others he comments on, it’s nothing more than that we raise them in a “deserving state” (airworthy condition after storage, journ.anm.), Said CFO Geir Karlsen.
By getting them out of long-term storage and up to air-condition, the leasing companies will be able to quickly transfer the aircraft to new customers when they find them, thus easing the burden on Norway.
– They want the planes to be repaired and parked at a place of their choice, but they still lease to Norway, Karlsen continues.
The leasing giant will sublet all the aircraft they have leased to Norway
One of these is the British-registered aircraft with registration number G-CKWB. According to data from Flightradar24, it set off from Sola airport at 12:25 and landed just over an hour and a half later in Shannon.
The Aeronews website posted photos of Shannon Airport on November 26 when the plane arrived for storage.
SAS will apply to Norway for a loan guarantee anyway: – We have to prepare for very low demand
Unclear how big the fleet will be
At a board meeting on 17 November, the Norwegian board decided to “reduce the aircraft platform” for the company as part of the restructuring in Ireland, according to the notice convening the company’s general meeting.
– What does this board’s decision mean, how many aircraft will leave the fleet and will you also cut the number of AOCs (subsidiaries with aircraft licenses)?
– We are working on a plan to modify the fleet. We are in that process now and have a plan for where we will end up, but the final decision has not yet been made, CEO Jacob Schram told E24.
Earlier this year, Norway outlined a plan that they go from the original pre-crisis plan of the 168-corona crisis in 2020, to between 110 and 120 planes after the crisis.
Now Schram says it’s too early to go public with how big and what the fleet will look like.
– We have a plan for what we want to achieve, but we must also look up the outcome of the proposed issue of up to four billion kroner, adds CFO Geir Karlsen.
Historical deficit in SAS: 10.6 billion in minus before tax