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Norwegian Air signs deal for two more Boeing Dreamliners

12/18/2013 | Reuters

OSLO (Reuters) - Norwegian Air (NWC.OL) is buying another two Boeing (BA.N) 787-9 Dreamliners, seeing the aircraft's technical advances as outweighing its operating problems as the budget carrier expands in long-haul services.

Europe's third-biggest budget airline said on Wednesday it had signed a deal to buy the two planes and was negotiating for further Dreamliner deliveries, despite a series of problems with its existing planes earlier this year.

Norwegian launched long-haul operations this year and hoped to capitalize on Dreamliner's lower operating costs, as the jet's lighter-weight engines promised a 20 percent savings on fuel.

But during the autumn its first two Dreamliners broke down more than half a dozen times, forcing it to lease back-up planes on short notice or cancel flights. The two Dreamliners with problems are now back in full operation.

Recent technical problems have not reduced Norwegian Air's appetite for Boeing's latest model, its chief executive told Reuters.

"We are in concrete negotiations about more Dreamliners than the two we are announcing today," Bjoern Kjos said on the margins of a visit to the Oslo stock exchange, adding there could even be even more order further down the line.

"We are not thinking of stopping at 10 Dreamliners ... How many Dreamliners we will have in 2020 depends on how many we can get hold of in 2016 to 2017. There is limited availability. At the same time not everyone can get hold of them."

Norwegian currently has three Boeing 787-8s in operation and another five on order. The 787-9 is a stretched version of the plane with longer range. The latest two planes on order, for delivery in 2016, would bring the number of Dreamliners Norwegian Air wants to 10.

Norwegian Air, which ranks third among budget carriers by passenger numbers after Ryanair (RYA.I) and easyJet (EZJ.L), put its third Dreamliner into operation in November.

Last year the airline placed one of Europe's biggest-ever aircraft orders, for 222 narrow-body aircraft worth $21.5 billion at list prices, split between EADS (EAD.PA) unit Airbus and Boeing.

Norwegian Air was not the only company with problems with Dreamliners as Air India and Japan's JAL (9201.T) have also faced problems.

Boeing has said it is committed to improve the performance of the plane and is putting in appropriate resources to fix the problems.

(Editing by David Holmes)

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