OSLO -- Norwegian Air Shuttle has signed an agreement to sell 100 percent of its Argentinian subsidiary Norwegian Air Argentina (NAA) to JetSMART Airlines. The latter will take over the NAA operation, effective immediately.

To minimize impact on passengers, JetSMART will continue to operate NAA scheduled flights from Aeroparque airport in Argentina. The parties expect that the integration process will take several months. During this period, the Norwegian brand will be phased out in the domestic Argentinian network.

Over the next six months, the three Boeing 737-800s operated by NAA will be replaced by JetSMART's Airbus A320s. The three 737s will return to service in Europe for Norwegian.

"As Norwegian moves from growth to profitability, we are taking all the necessary actions required to ensure that Norwegian is well-positioned going forward. Over the past few months, we have made important changes to our route network to ensure long-term profitability. Attaining satisfactory profitability for a relatively small domestic operation has proved difficult to achieve, given the overall situation in the country. While most of NAA's costs are denominated in dollars, revenue is obtained in pesos only, and the sharp depreciation of the peso against the dollar has created a significant gap between costs and revenue," said Norwegian's acting CEO/CFO Geir Karlsen.

Karlsen added, "We believe that the agreement we have signed today with JetSMART secures a significant part of what we have built over these two years; continuity of the network and opportunities. It brings the two newest airlines in Argentina into a stronger combined entity that currently carries about 10 percent of the domestic market and will become the third largest operator in the country."

JetSMART CEO Estuardo Ortiz said, "We are very excited about the opportunity to combine Norwegian Argentina with our current JetSMART operations. JetSMART has a long-term commitment to Argentina as well as of our vision of becoming the leading ultra-low-cost airline in South America. With this transaction, we will continue providing affordable air travel to our customers both from Aeroparque and El Palomar airports."

Additional terms and conditions of the transaction were not disclosed.

NAA solely operates domestic flights within Argentina, so the sale will not affect Norwegian's long-haul flights between London and Buenos Aires. These are operated by its British subsidiary Norwegian Air UK.

NAA received its Air Operator's Certificate in January 2018, and started operations in October 2018. The carrier operates 20 daily flights across eight routes between Buenos Aires' Aeroparque airport to Bariloche, Cordoba, Iguazu, Jujuy, Mendoza, Neuquen, Salta, and Ushuaia. NAA has so far carried 982,000 passengers.

Source: Norwegian Air Shuttle