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Norwegian Air Places $5b Boeing Dreamliner Order


Boeing Dreamliner

Norwegian Air Shuttle AS agreed to buy 19 Boeing Co. 787s worth more than $5 billion at list prices, doubling the size of the Dreamliner fleet that it’s counting on to make long-haul discount flights profitable. Norwegian Air will first order 19 of the 787-9 planes, with delivery between 2017 and 2020, and will have an option to order an extra 10, as it expands into long-haul services offerings and adds to its fleet of eight 787-8 and 90 737MAX jets. Norwegian Air has expanded rapidly and is trying to take market share from traditional flag carriers. In April of last year, it suspended talks on buying 20 Dreamliners from Boeing because of a delay in receiving U.S. backing for its long-haul plans.

Our calculations are clear, Chief Executive Officer Bjoern Kjos said in an interview in Oslo. You have to fly new planes. The low-cost carriers that make money fly only new planes, not old ones. This is just the start."

Norwegian Air is pursuing one of the industry’s most ambitious growth plans as it bets that the 787 will allow it to thrive in a long-haul market where no-frills predecessors such as Laker Airways have failed. Shares of the carrier, which competes with Ryanair Holdings Plc in short-haul flights, fell 8.9 percent after it posted earnings that below analyst estimates.

Norwegian Air CEO Bjørn Kjos said:

"This order of 19 new Dreamliners is a major milestone and enables Norwegian to offer a wide range of new routes to consumers worldwide. After two years of operating low-cost long-haul flights, our load factors have averaged in the nineties, which proves the demand for affordable flights between Europe and the US and Europe and Asia. Future growth and competiveness in the long-haul market depends on the fuel-efficient, state-of-the art 787 Dreamliner. Not least, the Dreamliner offers the best passenger experience. The order is also essential to further strengthening the company in the global competition.

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