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Norwegian Cancels Boeing Jet Order Worth $2.57 Billion, Sues the Aircraft Manufacturer

Norwegian Cancels Boeing Jet Order Worth $2.57 Billion, Sues the Aircraft Manufacturer

Photo Credit: Norwegian

The low-cost long-haul airline Norwegian has cancelled a 97 strong order for Boeing 787 Dreamliner and 737MAX aircraft with the U.S. aircraft manufacturer according to a statement filed late on Monday evening with the Oslo Stock Exchange. The order is worth $2.57 billion at list value, although the airline would likely have negotiated a massive discount on that price.

The outstanding order consisted of five Boeing 787-9 Dreamliner aircraft and 92 Boeing 737MAX aircraft. Norwegian currently owns a 31-strong fleet of 737MAX jets which have all been grounded since March 2019 after 346 people were killed following two fatal crashes of the aircraft type in less than six months.

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Photo Credit: Norwegian

The 787 Dreamliner fleet has also faced serious issues with the Rolls-Royce manufactured Trent engines needing early repairs that grounded swathes of Norwegian’s long-haul workhorse through much of 2018 and 2019. In February, Norwegian reported an annual loss of NOK 1,609 million for 2019 citing its 787 and 737 woes for what it described as a “challenging year”.

In addition, Norwegian has also cancelled a Boeing GoldCare maintenance package which, when signed in 2016, was the largest commercial services order in Boeing history. The agreement was originally meant to run through to 2034.

In a statement, Norwegian explained:

“The Company’s 737 MAX aircraft have been grounded since the worldwide grounding of the aircraft type was imposed on 12 March 2019. This has also disrupted NAS’ operations and caused significant losses.”

“In addition, Norwegian’s Rolls-Royce Trent 1000-powered 787 aircraft have suffered from long-running reliability issues that have affected reliability and resulted in premature and unplanned maintenance, which has disrupted the Company’s operations and caused further significant losses.”

“Norwegian has engaged in a commercial dialogue with Boeing with a view to resolving its 787 and 737 MAX issues and obtaining compensation for its losses. The dialogue has [yet to date] not led to an agreement with reasonable compensation to the Company.”

The airline said a legal claim had also been filed for the return of pre-delivery payments, along with compensation for losses associated with the 737MAX and 787 Dreamliner issues. Norwegian did not provide further details about its legal action and Boeing has not yet publicly commented on the news.

Norwegian has recently announced the restart of some European short-haul flights following the easing of COVID-19 lockdown restrictions. The resumption of services comes some six months earlier than originally planned, although the airline has not yet announced any plans to restart its long-haul services which might not follow until April 2021.

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