Norwegian Air Shuttle’s leasing arm has reached an agreement with Airbus to postpone deliveries of Airbus A320neo and A321LR aircraft as part of an ongoing drive to reduce costs and boost profitability, cutting capital expenditure by $570 million over two years. 

The Scandinavian long-haul LCC said its subsidiary Arctic Aviation Assets had reached a deal with the Toulouse-based aircraft manufacturer to reschedule part of its order book, including both A320neos and A321LRs, the result of a dialogue between the two parties over the past months.

“The postponement is expected to reduce the company’s capital expenditure commitments by approximately $570 million in total for 2019 and 2020,” Norwegian said April 10. 

Norwegian has pledged to cut costs and grow more profitably after years of rapid expansion, which have raised questions over the sustainability of its strategy. 

Earlier this year it undertook a rights issue to shore up its balance sheet after British Airways parent IAG, which had taken a stake in Norwegian with a view to making a full takeover offer, said it would not be making a bid for the company. 

“The postponements are in line with the company’s strategy of capitalizing on the scale built up over the last few years and the changed focus from growth to profitability,” Norwegian said, adding that the announcement was an extension of information provided when it announced its rights issue on Jan. 29. At the time it said that aircraft delivery postponements could be used to reduce capital expenditure, along with aircraft sales.

According to Airbus’ latest orders and deliveries information, Arctic Aviation Assets has seven A320neos on order and has taken delivery of seven of the type while Norwegian has 63 A320neos and 30 A321neos on order.  

Norwegian had said in February it was postponing 12 Boeing 737 MAX deliveries from 2020 to 2023 and 2024 and four Airbus A321LR deliveries from 2019 to 2020. 

It also said in February it had sold 15 aircraft in 2018 with letters of intent signed to divest a further four. 

Helen Massy-Beresford,