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Boeing Receives $3.1 Billion Order from Norwegian Air

Norwegian Air Shuttle ordered 42 Boeing 737-800 planes with a list price of $3.1 billion, landing the U.S. group its biggest European 737 order this year and its biggest-ever order from a Scandinavian carrier.

Norwegian also secured rights to buy 42 more of the short-to-medium haul model, the low-fare airline said on Thursday.

"We have not paid the full list price, but exactly how much we have paid is a corporate secret," Chief Financial Officer Frode Foss told Reuters.

Boeing said the order was the largest ever from any Scandinavian carrier and was the largest European order this year for the 737.

The planes will be delivered from 2009 through 2014, with about 10 planes to come each year, and will supplement 11 Boeing 737-800s that Norwegian ordered in May this year.

"The new airplanes will strengthen Norwegian's competitive position in the Norwegian, Nordic and European aviation markets," Chief Executive Bjorn Kjos said in a statement.

The U.S. Export-Import Bank could finance 85% of the list price, Norwegian said.

"We will consider all possibilities for financing," Foss said. "The planes will be financed one by one, and if we finance them in full or choose a share issue, we will come back (with an announcement) at that point."

Forty-two new planes is roughly the size of Norwegian's fleet as of today, but Norwegian, which has a market capitalisation of around $430 million, said it may grow further.

"We will look at the development in Norwegian and in the market moving forward and grow if the conditions call for it," Foss said.

Cost Efficient

Norwegian, a tiny rival to Scandinavian airline SAS, said the new planes are more cost-efficient and more environmentally friendly than its existing fleet.

The reduction in fuel consumption is up to 33% and the reduction in nitrogen oxide (NOx) emissions up to 43% compared with the oldest airplanes in Norwegian's current fleet, the company said.

"(The plane's) versatility will allow Norwegian to operate it very economically on both its short-haul and long-haul routes," Marlin Dailey, Boeing Commercial Airplanes vice president, said in Boeing's statement.

The new airplanes each have 189 seats, against 148 seats in the current 737-300, it said.

"These purchases will open up new opportunities, enabling us to fly longer distances and thus consider new, interesting routes," Kjos said. He said this will ensure greater flexibility when phasing out older airplanes and adapting to market trends.

On Aug. 28, the U.S. Federal Aviation Administration (FAA) ordered several airlines operating Boeing's 737 airplanes to inspect their planes after an explosion and fire erupted, destroying a China Airline 737-800 in Japan last week.

The FAA required check-ups of all 737-600 through 900ER models.

Norwegian Air shares traded up 2.1% at 120.50 crowns at 0959 GMT.

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