Low-cost airline operator Norwegian has entered a joint venture (JV) deal with China Leasing International DAC (CCBLI) for the purpose of financing, owning and leasing its new ordered aircraft.

The newly ordered fleets comprise 27 Airbus A320 NEO aircraft, which are scheduled to be delivered between 2020 and 2023.

The agreement is expected to strengthen Norwegian’s financial stability by reducing its committed capital expenditure by $1.5bn based on the initial 27 aircraft.

CCBLI will provide senior debt financing for the aircraft within the JV.

Norwegian acting CEO Geir Karlsen said: “This agreement will contribute significantly to reducing our current and future capital expenditure. The JV is one of many important initiatives that need to be realised to deliver on our strategy of moving from growth to profitability.

“I am convinced that CCBLI with its professionalism, financial strength and capabilities will be an excellent partner for Norwegian going forward. This JV is an important first step in building a strong strategic partnership between our two companies.”

Owned by China Construction Bank Corporation, CCBLI is involved in banking, financial services and leasing.

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The company will hold a 70% share in the JV while Norwegian will hold the other 30% through its fully owned subsidiary Arctic Aviation Assets DAC.

CCBLI head of aviation Kevin MI said: “We have during the past year developed a good relationship to Norwegian, including two already executed transactions and we are very much looking forward to continue building on this relationship through this JV.”