Norwegian Air and Finnair Getting Closer

Norwegian Air Shuttle ASA, Europe’s fourth-largest discount carrier, expects to reach a cooperation agreement on feeder traffic with Finnair Oyj in the first quarter.

“We’re working on it and we expect it will be settled in not too long,” Chief Executive Officer Bjoern Kjos said in an interview in Oslo today.

The carrier is working on a deal to funnel passengers onto Vantaa-based Finnair’s long-haul flights to Asia. Finnair, Finland’s biggest airline, said in June that implementation of the planned alliance had been delayed by the incompatibility of the airlines’ information-technology systems.

The Norwegian low-cost carrier agreed in November to lease two Boeing Co. 787 Dreamliners from International Lease Finance Corp. as part of its plan to add long-haul routes. The airline will take the 787s on 12-year leases from the fall of 2012 and expects to order at least four more this year, Kjos said today. The carrier already has 63 short-haul Boeing 737s on order after adding 15 to a contract in July.

“We prefer to lease to start off with, and then move on to buying,” Kjos said. “The capital requirements are much lower when leasing.”

The Dreamliner’s scheduled entry into commercial service has been postponed six times and was targeted for the first quarter of 2011 before a fire grounded Boeing’s fleet of the aircraft in November. The 787 is the first airliner made of composite plastics instead of the traditional aluminum. Boeing has been struggling with the new carbon-fiber materials, parts shortages, redesign work and a greater reliance on suppliers.

Kjos said he was not concerned about delays.

“Normally this shouldn’t have any impact on deliveries, unless they stop the production line,” Kjos said. “But if delivery was scheduled for 2011 you’d have problems.”

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