Norwegian's Irish unit earmarks €813m to help fund aircraft purchases as expands its fleet
Arctic Aviation Assets, an Irish unit of Norwegian Air Shuttle that handles management activities such as aircraft acquisition and financing for the group, had €813m of prepayments earmarked to cover aircraft purchases at the end of 2016, accounts for the business show.
Norwegian Air Shuttle, headed by CEO Bjorn Kjos, has been significantly expanding its aircraft fleet and uses the Arctic Aviation vehicle as one of its primary vehicles for such group transactions.
Newly-filed accounts for Arctic Aviation show that at the end of 2016, it had set aside €348m for aircraft payments that would fall due within 12 months, and an additional €465.5m for payments that were due after one year.
"Pre-delivery payments relate to aircraft on order and are capitalised by the company as a financial asset," the accounts note. "Pre-delivery payments that arise within 12 months before the delivery of each aircraft are classified as current assets."
Arctic Aviation keeps its cash on deposit with Danske Bank.
Norwegian will have 144 aircraft in its fleet by the end of this year, including 21 Boeing 787 Dreamliners. It has 110 Boeing 737 Max aircraft on order.
Norwegian launched flights between Ireland and the United States during the summer, using Boeing 737 jets. It intends to operate all the services using Boeing 737 Max aircraft, which it started taking delivery of in June.
Norwegian is also opening a pilot base in Dublin. It said this week that it will host open days with a view to recruiting as many as 40 pilots for its 737 aircraft in the capital initially to serve its Irish routes.
Yesterday, Air Canada said its low-cost Rouge service will also use the 737 Max to operate flights next year from Dublin to Montreal and Shannon to Toronto.
A full Air Canada service will operate between Dublin and Toronto from next month, having previously been an Air Canada Rouge service. Air Canada Rouge also flies from Dublin to Vancouver. Air Canada Rouge will operate a business and economy class on the Max jets.