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Norwegian Says it Wants Compensation From Boeing for 737 MAX Grounding

Norwegian Says it Wants Compensation From Boeing for 737 MAX Grounding

Norwegian Says it Wants Compensation From Boeing for 737 MAX Grounding

Well, this could get interesting… The chief executive of the world’s fifth largest low-cost airline has said he expects Seattle-based aircraft manufacturer Boeing to pay out compensation for the near worldwide grounding of 737 MAX aircraft.  It follows two fatal crashes of the aircraft model in the last six months.

Bjørn Kjos, the chief executive of Norwegian took to Twitter to apologise to customers after the airline made the decision to ground its fleet of 18 Boeing 737 MAX 8’s yesterday afternoon.  Kjos said customers would be booked onto alternative flights, with some services amalgamated and other customers rerouted.

While the majority of Norwegian’s 737 MAX aircraft serve intra-European routes, the airline has also used the more fuel-efficient aircraft on Transatlantic routes between Dublin and New York Stewart (SWF) and Providence (PVD), as well as between Edinburgh and Providence.

Saying that he “hoped and expected” the 737 MAX 8’s to be flying again soon, Kjos also responded to questions about how the grounding might affect the airline’s financials:

“Many have asked questions about how this affects our financial situation…it is quite obvious that we will not take the course related to the new aircraft that we have to park temporarily.  We will send this bill to those who produce this aircraft.”

Norwegian’s financial health has been the subject of much speculation over the last few months.  The airline reported a loss of nearly USD $200 million for 2018 following a period of rapid expansion.  Norwegian’s coffers also took a significant hit from problems with the Rolls-Royce engines on some of its Boeing 787 Dreamliner aircraft – the airline says it has agreed to terms of a compensation deal with Rolls-Royce over that debacle.

Just before Christmas there were even rumors Norwegian was on the brink of collapse and the carrier has embarked on an ambitious cost-cutting programme to shore up its financials.  In the last couple of months, Norwegian managed to raise additional capital but clearly, there’s concern that anything out of the ordinary could cause a real headache for the airline.

Hours after Norwegian took the voluntary decision to ground its fleet of 737 MAX aircraft, the European Air Safety Agency (EASA) published a Safety Directive which suspended operations of all MAX 8 and MAX 9 aircraft across the continent indefinitely.

The decision by EASA follows that of similar directives issued by aviation regulators around the world.  There’s is, though, one big challenge to Norwegian’s bid for compensation – and that comes from both the Federal Aviation Administration (FAA) and Boeing itself.  Both maintain the 737 MAX is safe and does not need to be grounded.

Pitting itself against the international community, the FAA said in a statement yesterday that no other civil aviation authorities have provided “data to us that would warrant action”.  The statement said that the FAA’s own investigations had found “no systemic performance issues and provides no basis to order grounding the aircraft”.

Boeing continues to say it has “full confidence” in the Boeing 737 MAX.

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